- How the Earned Income Tax Credit could impact you
- What to do if you need more time to file
- Tips on how to spot a tax scam
It’s that time of the year again – tax season. As you are imagining what you might do with your refund – buying that new television or putting it in savings – there are a few things you need to know before filing your taxes.
This year Democrats are trying to exempt most retirement funds from taxation as well as increase the state’s tax credit for low-income workers, but unless state lawmakers are able to agree on those changes and make them retroactive, taxpayers may not gain the benefits until next year. The chambers are expected to come up with a compromised plan in the coming days.
At the present time, the state’s Earned Income Tax Credit provides residents extra money or tax savings equal to 6 percent of the federal credit.
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However, if Democrats are successful in their efforts, over the next four years an average family of four making less than $57,000 a year could save nearly $2,500.
The IRS held an awareness day in January to provide more information about the Earned Income Tax Credit.
Some other tax credits will be reduced for the 2022 season. For example, those people that qualify for the federal Child Tax Credit will receive $2,000 per dependent for the 2022 tax year as compared to the more generous $3,600 per dependent they received for the 2021 tax year.
Find more information about what is new at the federal level when filing in 2023 here.
Keep deadlines in mind
As you are working on your taxes, keep in mind filing deadlines. Due to the Emancipation Day holiday in Washington, D.C., the last day to file Individual income tax returns is April 18, 2023. Returns must be postmarked by this date too.
You may find that you need more time to file. A recent survey found that as many as 33 percent of Americans put off doing their taxes until the last minute. If that sounds familiar, consider filing for an extension. You will need to complete this form by April 18 which allows for an extension good through Oct. 16.
The state tries to be aware of people’s individual situations, according to Ron Leix Jr., spokesperson for the Michigan Department of Treasury.
“Oftentimes we try to work with the taxpayer regarding their circumstances,” he explained.
After your taxes are filed, people should receive their tax refund within three weeks if they file electronically, according to the IRS. Direct deposit is the easiest and fastest way to get your refund.
Watch for scams
The IRS warns taxpayers of scams as they are more common around tax season.
“We ask people to be cyber-vigilant, cyber-aware and prepared,” Leix Jr. said.
He suggests that when navigating on the Internet or when you receive a solicitation from somebody, “just be aware and double check to ensure that the person you’re talking to or the website that you’re going to is legitimate.”