Your tax refund may be smaller this year; here's why

So, whether you expect to file your 2022 federal income tax return right away or wait until the last minute, now is a good time to get a sense of whether you'll owe more money to the IRS, or whether you'll likely get a refund and if so, how much.

Child tax credit: For tax year 2022, parents may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 . Above those levels, the credit starts to phase out. And the portion of the credit treated as refundable - meaning it is paid to you even if you don't owe any federal income tax - is capped at $1,500, and that is only available to those with earned income of at least $2,500.

On your 2022 return, for example, you may claim a maximum of 35% on up to $3,000 in expenses for one person, or up to $6,000 of expenses for two or more people. It is a non-refundable credit, meaning you may only claim it if you have federal income tax liability to offset. The EITC is also available to earners without qualifying children. But the size of the credit for someone in this group is just $560 for 2022. That is almost $1,000 less than the $1,502 they were allowed to claim in 2021 as a result of a one-year enhancement that was part of the American Rescue Plan.

But for tax years 2020 and 2021, filers were allowed to take what's called an above-the-line deduction for charitable contributions up to $300 in addition to the standard deduction.Severance payments: If you were laid off last year and received a lump sum payment for severance, that money will be taxable in 2022. So if it happened late in the year, that may bump your 2022 income into a higher bracket, much the way a big one-time bonus might.

If all you did was book capital losses this year, you can still offset your income up to $3,000 and carry forward the rest.Make an IRA contribution: You still may make 2022 contributions to an IRA up until April 18, 2023. The annual limit on those contributions is $6,000 .

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