KNOXVILLE, Tenn. (WATE) — With tax season upon us, experts from the University of Tennessee Boyd Center for Business and Economic Research joined WATE 6 On Your Side to explain what’s new for those who still need to file in 2023.

The first thing taxpayers need to know is that taxes will be due on a different day this year since April 15 falls on a Saturday and the following Monday is Emancipation Day. This means tax returns are due by midnight Tuesday, April 18, 2023.

Of course, anyone can still get an extension to file taxes by October 15 by filing form 4868. This is an extension to file, but not an extension to pay. 

LeAnn Luna, a Professor of Accounting for the Department of Accounting and Information Management in the Boyd Center at UT Knoxville, explained why tax refunds may also be smaller this year than the previous year. Luna pointed to two main reasons, which are detailed below.

  • A change to the deduction for charitable contributions: Generally, people need to itemize deductions to get a charitable contribution deduction. However, in 2020 and 2021, Congress allowed all taxpayers to deduct $300 (or $600 for couples) even if they didn’t itemize. The tax break was intended to help charities get by through the pandemic by incentivizing taxpayers to donate but it wasn’t extended for 2022. Now, no charitable deduction unless you itemize in 2022 and beyond.
  • Changes to various tax credits: Various tax credits were raised during the pandemic and are now back to pre-pandemic levels. The changes could lower refunds by thousands of dollars for families with children. If people took the child tax credit, the dependent care credit, or the earned income credit in 2021, their refund may go down substantially. 
  • Additionally, the pandemic stimulus payments and recovery rebate credit have ended.

When asked if there was any ‘good news’ for taxpayers, Luna had a resounding yes. She explained the standard deduction for 2022 is higher and the 2022 tax brackets were raised to account for inflation. She said this means it is possible some taxpayers may get bumped down to a lower rate for their 2022 tax return. 

Lastly, she said retirement contribution levels increased for 401(k)s and IRAs.