AUSTIN, Texas — Tax season is officially underway, and tax experts say this year's refund may be smaller than what you saw last year.
Vanessa McElwrath is a certified public accountant and certified financial planner with ML&R Wealth Management here in Austin. She joined KVUE to talk taxes.
What are some of the reasons people might be seeing a bit of a smaller refund this year?
"Well, you know, this year, the IRS, they've made a lot of changes because we're coming to the end of a lot of those pandemic-related benefits. And so we had some new benefits in years past, and now those are kind of coming up. So that's going to leave folks with some smaller refunds. And probably one of the biggest is the child tax credit. So for parents of children under 19, they may be eligible for this credit. This year, it's going back to $2,000 per child. And last year, you know, was significantly higher. It ranged from $3,000 to $3,600, depending on the age of the child. And that was bumped up because of some pandemic-related release."
Is that the biggest pandemic-related tax change this year as opposed to what we saw last year, the child tax credit?
"Yeah, that's going to be the biggest one that's been phased out that now is probably going to have the biggest impact on, I would say, the bottom line for folks across the board."
People want to know: what are the ways you can maximize that refund, if you're going to get a refund? What are some ways that people that are filing for this 2022, what are some ways they can maximize that refund?
"Well, No. 1 is you want to be efficient and effective. So that means getting your taxes filed sooner rather than later so you can get that refund quicker. And I would just caution folks, because the IRS is still struggling with a huge backlog of returns to process, and so filing online, it's going to be the most efficient and effective method. So, by doing that, you'll typically get your refund in about 21 days, whereas if you're filing via an old snail mail paper return, you know, you're looking at a much longer window of time. And especially on interest rates and getting that money back sooner, sooner is better."
That was going to be my next question. So there is a benefit to getting on it now, getting it done early and getting it in early?
"Yeah, exactly. I mean, the longer you wait, you're just kind of getting at the back of the line. And if it's not processed online, it's got to get sifted through in a physical facility. So as you can imagine, that just takes a much longer time."