It’s safe to assume that preparing your 2022 tax return will be just as time-consuming and difficult as it always is, but there are measures taxpayers can take now to ease the process. For the upcoming tax year of 2022, there are some significant developments and essential factors that taxpayers should consider. Consider taking help from certified Aventura accounting services.
There will be no deductions for charity made before taxes are calculated. Donations to charity during COVID were eligible for a tax deduction of up to $600. Donations made above the line will still be tax deductible, but only for individuals who itemize their returns.
More people could qualify for the Premium Tax Credit. Those who file their taxes in 2022 may still benefit from the premium tax credit’s temporarily increased eligibility. If you need further explanation on this matter, it is recommended that you consult an expert.
The amounts of several tax credits are again what they were in 2019. As a result, affected individuals should expect a much lesser tax refund this year than last. The Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CTC), and the CTC have all adjusted their amounts.
- Taxpayers who qualified for the CTC in 2021 and received $3,600 per dependent will receive $2,000 in 2022.
- Eligible taxpayers without children will see a reduction in their EITC benefit from $1,500 in 2021 to $500 in 2022.
- In 2022, the maximum amount of the Child and Dependent Care Credit will decrease from $8,000 to $2,100.
- In 2023, refunds could be less generous. Since there were no Economic Impact Payments in 2022, taxpayers cannot expect to get a stimulus payment along with their 2023 tax refund. The standard deduction taxpayers who do not itemize cannot deduct their charitable contributions.
Recipients of the tax credit for environmentally friendly automobiles must now meet the new eligibility requirements. Taxpayers should be aware of various changes, including the fact that the tax credit is normally limited to eligible electric vehicles for which final assembly happened in North America.
FIND YOUR TAX DOCUMENTS FOR 2022
The most efficient method to get ready to file taxes is to compile all relevant tax documents, whether digital or paper, and store them in one convenient location. Forms W-2 from employers, forms 1099 from banks or other payers, forms 1099-K from third-party payment networks, forms 1099-NEC for nonemployee compensation, forms 1099-MISC for miscellaneous income, and forms 1099-INT for interest, and records proving all digital asset transactions.