SAN DIEGO (KGTV) — Starting today people can begin filing their 2022 income taxes. Tax experts say this year’s returns will likely be smaller than previous years.
More than 168 million people are expected to file a return this year, according to the Internal Revenue Service (IRS). With all of the changes, this time around it may not be a good idea to wait until the last minute.
Local tax preparer Dee Lovett, the owner of Dee the Tax Lady, says Monday is the start of the busiest time of year for her team.
“We're a small team,” says Lovett. “My husband and I own the company.” Lovett also shares that her sister-in-law is an important part of the team.
Lovett says what started as a temporary trade became a full business for this family.
“In 2007 my husband and I were very heavy into real estate and that's when the market kind of went crazy,” says Lovett. “When we were in college we use to do tax returns. So we went back to that. We started the tax business to feed the real estate side of the business but, what ended up happening is the tax business just took off.”
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With Monday being the start of tax season there are some things that taxpayers should keep in mind.
“There are so many changes that have taken place for this tax year that it’s literally going to affect almost everyone.”
Changes for families include the Child Tax Credit, Earned Income Tax Credit, and the Child & Dependent Care Credit.
“What happened last year, because individuals had children, they were able to get more money from the federal government which gave them a larger refund. That's not taking place this year.”
In the state of California, the minimum wage has increased each year since 2017. This could also impact a person’s return.
“The more you make the taxes have to be adjusted accordingly.”
With all of the IRS changes this year Lovett says it's best to file your return with a licensed tax preparer.
“When you make a mistake you will definitely hold up your refund, your tax file will be pulled, and it will be audited.”
Reasons for smaller refunds
Experts says there are three main reasons you may see a smaller refund.
- The loss of the $4,100 personal exemption, which until this year reduced your taxable income by four grand.
- A new limit on state and property tax deductions to $10,000. This primarily affects people in high tax communities, in homes valued above $300,000, who used to deduct $15,000 or more per year in state and local taxes.
- Reduced payday withholding, after the IRS lowered tax rates last February. If your paycheck was bigger starting last February 15, it wasn't all due to the tax cut. Part of that bigger check was the result of adjusted withholding, where Uncle Sam took out less.
The tax filing deadline is Tuesday, April 18th.
