CORPUS CHRISTI, Texas — Important changes are coming to the federal tax code that may mean a lot more money in refund checks this year.
Child tax credits, higher tax brackets, and even a credit for electric vehicles and certain home improvements may mean a better refund than last year.
Del Mar accounting professor Adelfino "Fino" Palacios said the adjustments are happening because of inflation.
"Standard deduction is a little higher," he said. "Earned-income credit is a little higher. And the tax schedule changed, also, where you're taxed at a lower rate at higher incomes."
Palacios said some parents are in luck this year.
"Currently if you're under 17 years old, you get a $2,000 credit," he said. "Some of it is refundable. If you're over 17, it's only a $500 credit."
The maximum credit for the 2023 tax year is $7,430; up almost $500 from $6,935 the year before.
The refund cap was previously $1,600. It increases to $1,800 in 2023; $1,900 in 2024; and so on in successive years.
Energy-efficient home improvements also will get residents some money back.
"That was a major change," he said. "Before, that credit -- if you used it, you couldn't use it anymore. Starting in 2023, if you bought an air conditioner, you get a credit for that. It's a larger credit than before. But then the following year if you need to replace windows or do insulation you can use the credit again."
Palacios said the IRS has moved tax brackets forward a bit.
If you made $45,000 in 2023, you would have fallen into the 22 percent tax bracket for that tax year. But if your income remains at $45,000 in 2024, you'll drop down to the 12 percent bracket. That means you'll be paying less tax next year and will have less money withdrawn from your paycheck.
There is even an increase in the $7,500 deduction for an electric vehicle.
"Wherever you're buying the electric vehicle from, talk to the dealer, he said. "The dealer will know whether that vehicle qualifies for the special credit."
Palacios said the tax code goes through some change each year.
"You might miss certain things if you try to do it on your own," he said. "And basically if you have a W-2, and nothing else, you can do it on your own."
Most taxpayers get their refunds within 21 days.
People who file their taxes as soon as possible on Jan. 29 should get their payments by Feb. 19.
VITA is one place that can help you with taxes
On Tuesday, local students and volunteers from Del Mar College and United Way will help you get your tax paperwork in on time with the Volunteer Income Tax Assistance (VITA) program.
The four locations to get free help with your taxes including Del Mar Heritage (East) Campus, Texas A&M University-Corpus Christi, Goodwill Industries on Ayers, and United Way of the Coastal Bend on Everhart.
For more information click here.
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