As a Certified Public Accountant with a Master’s degree in Taxation from Florida State University, I have provided tax preparation services for over 24 years. With extensive experience in this field, I stay up-to-date on the latest tax laws and regulations by waiting until the end of the year for the updated tax law changes for the current tax season.
Coming from a family of tax professionals who has been running a successful business in the Pace/Pensacola area since the 70s, it was a natural progression for me to follow in their footsteps to continue providing quality service to clients in the area.
Note: This tax season, many of the changes in tax laws may lead to individuals receiving lower tax refunds or even owing money to the IRS. It’s essential to be aware of these changes and understand how they may impact you. Please continue reading to learn more about these changes and how they may affect your tax situation.
Changes for the 2022 tax year:
The deadline to file your individual tax return is April 18, 2023.
Standard deduction
- $12,950 for single filers and married couples filing separately (an increase of $400 from 2021).
- $19,400 for heads of households (an increase of $600 from 2021).
- $25,900 for married couples filing jointly (an increase of $800 from 2021).
Cash Donations
For 2022, you can no longer deduct any cash donations unless you itemize. IRS estimates only 10% of all filers can take itemized deductions.
Parent Credit Changes
Note: A lot of tax credits have reverted back to pre-pandemic numbers. This year there will be a lot of refunds that are smaller than in prior years, and even some parents will now owe money because of these changes. Parents are going to feel the effects more than others.
The child tax credit has reverted to pre-2021 rates. You will only receive up to $2,000 child tax credit for children 16 and under.
Dependent care (daycare) has also reverted back to pre-2021 rates. You can only deduct $3,000 per child up to $6,000 for multiple children.
The Earned Income child tax credit is based on several factors, including your income level, filing status, and the number of children you have. It’s important to note that even childless adults may qualify for this credit, but the qualifications and credit amounts have changed in the 2022 tax year. Therefore, it’s important to consult with a tax professional or use tax preparation software to determine the impact of this change on your specific tax situation and see if you qualify for the credit.
1099-K
As you prepare your taxes for the upcoming year, it’s important to be aware of a new tax form that many people may receive – Form 1099-K. This form is issued to individuals who make sales online through platforms like Facebook Marketplace, eBay, and Etsy or use third-party payment apps like Venmo, PayPal, or Square. These forms are used to report income that you’ve received through these types of transactions, and it’s important to note that you only need to pay taxes on the profits that you made.
It’s important to remember that receiving a 1099-K form does not necessarily mean that you owe taxes; however, it’s best to consult a tax preparer if you receive one of these forms. They can help you handle it in the best way possible and make sure you are not overpaying taxes. It’s also important to keep records of any sales made throughout the year. You will need to provide information on the cost of goods sold and any other expenses related to your sales to accurately report your income and compute your taxable profit. This could help you in reducing your tax liability.
***Important***
The standard mileage rate increased to 62.5 cents per business mile.
Long Wait Times
The IRS is still experiencing unusually long wait times for their customer service. As a result, it’s important to be aware of and respond to any letters that you receive from the agency in a timely manner. Keep in mind that the IRS will never contact you via email, they will only contact you by phone after a letter has been sent, but this is very rare. To stay updated on your tax information and avoid long wait times, it’s recommended that you set up an account on the IRS website (irs.gov). This will allow you to access all your information, check the status of your refund, and make payments online. By setting up an account, you can get up-to-date information without waiting on hold or in line.
Quick Links
As both a mom and a CPA, I love being able to share this important information and offer accounting and tax services for families in our area. It can be a complex process that changes from year to year, and having the latest information will better equip you when preparing this tax season.
