If you received any extra money in your bank account from the state of Illinois, you're being asked to wait on filing your return because you could be taxed on it.
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Illinois is one of 19 states that offered inflation relief refunds for taxpayers. The IRS said they aren't certain about the taxability of those payments, so they want taxpayers to hold off filing their returns until the IRS offers clear instructions.
Inflation also impacted the standard deduction this year, which increased.
"The standard deduction has actually has doubled in the last couple of years. For example, a single person, it used to be like $6,200. It's doubled to $12,400. For married couples, it used to be $13,000. Now it's up to 26,000," explained CPA Raymond Miller.
Miller also has some good news if you are self-employed.
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"The commuting expenses are still not deductible. However, even if you have a side gig -- whether it's it Lyft or Uber or, you know, just doing anything on the side -- those mileage amounts are deductible. It was 58 and a half cents. For the second half, it jumped to 62 and a half cents."
There's also good news for educators. Expenses for teachers have increased to $300 per taxpayer.
While inflation hurt your pocketbook, it may help you this tax season.
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"When it comes to your tax brackets, the numbers have increased because of inflation, so someone may qualify for a lower tax bracket based off of their income. So that's a big advantage," said Forbes Advisor and former IRS Agent, Kemberley Washington. "Unfortunately, not all the tax news is good. Your refund could be smaller if you file a child tax credit. For the child tax credit, $3,600 per child is now down to $2,000, and the child independent care credit was up to about $8,000 per child, and now that has reduced to about $3,000 per child."
There are also a fewer tax breaks for the unemployed.
"We know that many people receive tax breaks in the past. That's no longer the case this year, so you will have to pay the full amount of taxes on your unemployment," Washington added.
Remember to file electronically to get your refund faster and direct deposit that refund. Also, make sure to double-check the account information you give to the IRS.