Taxpayers could see smaller refunds this year

TAMPA, Fla. (WFLA) — As many people get back into the daily grind this month, many are carrying a bit of unwanted baggage into the new year after a season of holiday spending.

The 2023 holiday shopping season soared to new heights and was considered a record-breaking year for spending. The National Retail Federation reports more than 200 million shoppers bought gifts online and in stores, spending an average of more than $300.

“December’s numbers combined with November’s results show retailers had a very successful two-month holiday season,” Matthew Shay, CEO and president of the National Retail Federation, said in a statement. “Clearly, retailers got it right this holiday season, providing consumers with what they wanted, options on when and where to make their purchases and with prices customers were comfortable paying.”

However, now the shopping bills are due and so begins the slow recovery of the “holiday debt hangover.”

“We’ve done our holiday shopping, now we’re looking to get a little something back,” said Tiffany Watson, CEO and tax advisor of All Aboard Financial, which is based in Tampa.

Watson said her office is receiving more calls with questions about using money from tax refunds to settle the balance.

“Taxpayers should expect to see smaller refunds this year,” Watson said. “We aren’t seeing COVID relief this year. The child tax credit is decreasing, but the standard deduction increased. It may balance it out, but not a whole lot.”

However, as refund checks roll in, retailers will be enticing shoppers once again during a new season called “Taxmas.”

“Taxmas is the season where people are getting their refunds and so retailers see a huge spike in sales,” Watson said.

Watson’s advice is to avoid overspending and leaning on credit cards. She works closely with her clients to set new financial goals for the year ahead.

“I make sure we tax plan, so they aren’t expecting a refund or paying the IRS,” Watson said. “That’s the goal. To get you to a zero-tax liability.”

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