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Major changes that will have an impact on your finances in 2023

This year, millions of Americans will need to make budget adjustments due to changes to public assistance programs according to Fuller (2022). The pandemic’s impacts on people’s finances are still being felt today, and more changes are on the way according to an article published by Shimkus (2022).

Lower child tax credits were first on the list. Under the American Rescue Act, the child tax credit (CTC) was momentarily increased to a maximum of $3,600 in 2021 according to Cinone (2022). The new child tax credits were worth $3,000 for children aged six to seventeen, $3,600 for under the age of six, and $500 for college students up to the age of 24. However, since the increased tax credit was not extended, it is expected to revert to $2,000, which would be reflected when you submit your 2022 tax return.

The smaller tax returns come in second. Benefits from the pandemic era and the extra money they received with will also expire. The Internal Revenue Service (2022) reported that those short-term measures, such as federal stimulus cheques and the expanded CTC program, increased the average return by roughly 14% to $3,253 between 2021 and 2022. The returns were higher than anticipated since so many Americans were able to deduct these advantages from their taxes in 2021 and in 2020. However, the average refund when taxpayers submit their 2022 tax returns the following year is anticipated to be just $2,700, according to CBS News via Picchi (2022).

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Finally, the COLA wins and losses. Social Security, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI) recipients will be affected by the yearly cost-of-living adjustment (COLA), which is 8.7 percent this year (SSI). A maximum monthly increase of $73 will be applied to SSI beneficiaries’ payments (Weiss, 2022). Social Security beneficiaries will receive an additional $144.10 per month. Thousands of Americans who depend on public assistance programs are being affected by the increase, on the other hand.

 

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