/Why Your Tax Refund May Be Smaller This Year

Why Your Tax Refund May Be Smaller This Year

If you’re banking on a tax refund, it may be smaller, or you may owe money this season, according to financial experts.

Typically, you get a federal tax refund when you’ve paid or withheld more than the amount you owe, based on taxable income.

The IRS subtracts the greater of the standard or itemized deductions from adjusted gross income to reach taxable income, and there are a few reasons why it may be higher in 2021.

Advance child tax credit payments

The American Rescue Plan, signed by President Joe Biden in March, boosted the 2021 child tax credit to $3,000 from $2,000 per child age 17 and under, with an extra $600 for children under age 6.

Keep reading at CNBC for more.

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