Indiana taxpayers could get smaller refunds this tax season

INDIANAPOLIS — If you’re expecting a big refund check this tax season, you might be disappointed.

According to the Internal Revenue Service, many Indiana taxpayers could see their refunds drop by a few hundred to a few thousand dollars.

That’s because the federal government didn’t issue COVID-related stimulus checks in 2022, which some taxpayers received as a credit on their tax returns.

“That’s been added to your refund, while that’s not going to happen this year,” said Matt Jamison, a chartered accountant and president of On Target CPA in Indianapolis.

The child allowances have also expired, which will affect the amounts on the tax return.

“Last year, they were able to receive improved benefits in the form of child tax credits and childcare credits for childcare,” Jamison said. “These credits will be reduced this year, so they may get a smaller refund.”

According to the IRS, the average refund last year was nearly $3,200. That was an increase from about $2,800 in 2021.

Your refund this year could be more similar to your refund in 2019 or 2020, tax experts say.

WRTV investigations found that some Indiana taxpayers are still dealing with unresolved tax issues from previous tax years, including Carmel’s Judy Mohler.

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Mohler’s father passed away in August 2020 and she is trying to close his estate.

“We’re still waiting for my father’s 2020 refund, but it still hasn’t come,” Mohler said. “I just want this problem to be solved. They always have this problem out there.”

WRTV Investigates contacted the IRS, which is seeking to improve customer service this tax season by hiring 5,000 operators and more face-to-face staff to assist taxpayers.

“We’re staffed and ready and can guide you through any problems you might have,” said Luis Garcia, a spokesman for the IRS.

The IRS says even if you have an unresolved tax issue, file your taxes this year as usual.

“It’s fine to file your tax return for this year,” Garcia said. “We ask people to be patient with us.”

A new report from the National Taxpayer Advocate says the IRS will start the 2023 filing season in much better shape than it has been for the past two years.

The IRS entered 2022 with an unprocessed paper backlog of 4.7 million original individual returns.

But by Dec. 23, the IRS had further reduced its unprocessed paper inventory of original individual returns to about 400,000, the report said.

“This significant reduction in the backlog of paper returns will allow the IRS to begin processing paper-filed returns for tax year 2022 in the upcoming filing season,” the report said. “This is in contrast to the previous two years, when the IRS could only process current year returns months after the filing season ended.”

Still, tax experts warn against filing a paper return this tax season.

“All paper returns take a year to process,” said Matt Jamison, CPA and president of On Target CPA in Indianapolis. “Receiving the forms, filling them out and mailing them is really not advisable as it takes a lot of time to process and the IRS sometimes loses them.”

The deadline for submission this year is the 18th.

But remember that this is the filing deadline, not the payment deadline, and if you owe money, you could face penalties and interest after the deadline.

Tips for filing your taxes

You can contact the local Indiana taxpayer attorney at 317-685-7840 or click here.

You must fill out a form to request assistance from the Taxpayer Advocate.