Tax News & Tips for Tax Year 2022

• The filing deadline for the 2022 taxes is April 17, 2023

• Several tax breaks that led to bigger refunds or smaller bills during the 2020 & 2021 tax seasons won’t be available any longer. Those laws were temporary changes intended to help taxpayers economically survive the worst of the COVID-19 pandemic.

• The American Rescue Plan Act lifted that age limit for the 2021 tax year. This allowed some taxpayers over 64 years old and who worked in 2021 to receive the EITC when they filed their 2021 tax return. This tax break was only effective for the 2021 tax year. Under the current tax law, no seniors age 65 or older will qualify for the EITC after December 31, 2021.

• The Earned Income Tax Credit (EITC) is available to eligible workers from ages 25 through 64. However, the lower end of that age range was lowered just for 2021 by the American Rescue Plan. Therefore, some taxpayers ages 19 to 24 became eligible for the EITC for 2021 only. Under the current tax code, the age restrictions return so that no one under the age of 25 will qualify for the EITC when they file their 2022 tax.

• The American Rescue Plan increased the Child Tax Credit for 2021 not only in the amount of the credit but also in the age requirements The maximum credit was increased from $2,000 to $3,600 for children under age 6 and $3,000 for children ages 6 through 17 (previous maximum age UNDER age 17 will return for 2022 tax year). These changes to the Child Tax Credit were temporary for 2021 only. Most taxpayers with dependent children should expect to receive a smaller child tax credit for 2022.

• Social Security Benefits are increasing for 2023. Americans who collect Social Security will receive an 8.7% increase in their monthly payouts in 2023. The extra benefits kick in on January 1.

• IMPORTANT: “Corrected” forms are always a possibility. Be alert for such announcements and get them to me as soon as possible!

• Real estate sales are often reported on 1099-S. Stock sales on 1099-B or Consolidated 1099. Pension, 401K, and IRA distributions are reported on 1099-R. Pay special attention to forms 1099-A and 1099-C. These report foreclosures and debt consolidations or debt cancellations which may or may not result in taxable income. We need to see them to correctly prepare your return.

• 1095-A. You would receive a 1095-A if you purchased Health Care through the Health Insurance Marketplace and had part of your premiums offset by the Advance Payments of Premium Tax Credit. This form is needed to calculate the actual Premium Tax Credit for which you would be entitled.

• If you turned age 72 in 2022 and are taking your first RMD, you have until April 1, 2023, to do so. For each subsequent year, your RMD must be taken by December 31. Keep in mind, if you delay your initial RMD until April 1, you’ll be responsible for 2 withdrawals that year (one by April 1 and one by December 31), which could result in a larger tax liability. Most taxpayers take their first RMD by December 31.

• Child Care Expenses. I need the full name, address, telephone number and tax ID number of your care providers, and the total paid per child to each caregiver.

• Complex Transactions. Please call if you have a foreclosure, sale or exchange of real estate, casualties such as a natural disaster.

• Beware of Scammers Posing As The IRS Note that the IRS does NOT:
• Call you
• Does not ask you to confirm your social security number
• Demand that you use a specific payment method, such as a prepaid debit card, gift card or wire transfer. The IRS will not ask for your debit or credit card numbers over the phone.
• Demand that you pay taxes without the opportunity to question or appeal the amount that they say you owe. Generally, the IRS will first mail you a bill if you owe any taxes.
• Threaten to bring in local police, immigration officers or other law enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status.

Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

Do not give them any information. Always ask the caller for their federal ID # and a number to call them back on – but don’t call!