The maximum credit for the 2023 tax year is $7,430, up from $6,935 the prior year.īut Social Security beneficiaries may get hit with higher taxes, Jaeger warned. Homeowners who tapped expanded home energy tax credits might get a bigger refund, he noted, as well as people whose incomes didn't keep up with inflation.Īnother group that could see bigger refunds are low-income families with children, given an expansion of the Earned Income Tax Credit. "Like anything in the tax world, there are winners and losers," said Mark Jaeger, vice president of tax operations at TaxAct. Some of them might not have paid quarterly self-employment taxes and could owe the IRS come April 15, he noted. And more taxpayers could end up owing this year, especially given that more people took on side gigs last year to compensate for higher costs, Steber said. Not everyone will get a bigger tax refund, of course. One way to check your refund is to plug in your income and other data into a 2024 tax refund calculator, which are offered by tax prep companies such as H&R Block as well as financial sites such as Nerdwallet. "A lot of people didn't keep pace with inflation," Steber said, predicting that middle- and lower-income workers are the most likely to see higher refunds this year. That's below the 7.1% inflation adjustment adopted by the IRS for many tax provisions last year. The median worker saw their earnings increase about 5.5% in 2023, according to the Bureau of Labor Statistics. Steber said that prediction is based on modeling using last year's tax refund data, as well as the inflation adjustments from the IRS for tax brackets, the standard deduction and other provisions. "We are predicting a higher refund for those people, up to 10%" "Say your income didn't keep pace with inflation - you made the same as the prior year but didn't increase your income by that inflation rate of 7% or so - you could see a better refund," Steber told CBS MoneyWatch. That's because the IRS adjusted many of its provisions in 2023 for inflation, pushing the standard deduction to a more generous level and raising its tax brackets by 7.1% - a historically large adjustment. Ironically, inflation could ultimately benefit taxpayers this year, tax experts say.
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