The status of your refund likely depends on whether you took advantage of a number of Covid-era tax breaks available in tax year 2021. If you did, there's a chance you could owe a bigger tax bill for 2022 — or be owed a smaller refund.
Some of the changes to keep an eye on:
No more stimmies. Remember those? Millions of Americans received a $1,400 stimulus payment in 2021. Some people got payments straight to their bank account or by mail, but you may have received it as a rebate on your 2021 tax return. That won't be happening in 2022.
Child tax credit. Tax year 2021 featured an enhanced child tax credit of $3,000 for children under 18 and $3,600 for children under 6. For 2022, it's back to the old rules: $2,000 for children under 17. If you were planning on claiming the credit for your 17-year-old this year, you're out of luck.
Child and dependent care. Those who claimed a tax break on child and dependent care last year are seeing a reversion to lower limits as well. A credit for expenses such as day care was worth up to $8,000 in 2021, but for 2022 maxes out at the old threshold of $2,100.
Charitable contributions. Deducting charitable contributions is generally a tax move reserved for the small percentage of taxpayers who itemize deductions. Pandemic-era rules, however, allowed all taxpayers to deduct up to $300 ($600 for married couples) worth of charitable contributions, even if they took the standard deduction. That break won't be available for tax year 2022.
For tips on how to prepare for a smaller refund or even lower your 2022 tax bill (there's still time!), check out the full version of this story on CNBC Make It.
