Preparing for the Tax Year 2023

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 important factors that taxpayers should consider. You should speak with a professional CPAs accounting services if you have any questions. 

In other words, no more itemized deductions for charity. 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’d want additional details on this subject, feel free to give us a call.

As of 2018, Form 1099-K must be filed according to new guidelines. If you received payments from third parties in excess of $600 in 2022 for goods and services, you should receive Form 1099-K, Payment Card, and Third Party Network Transactions, by January 31, 2023.

The amounts of several tax credits are once again what they were in 2019. As a result, affected individuals should expect a much lesser tax refund this year compared to last. The Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CTC), and the CTC have all had their amounts adjusted.

• 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. To qualify for the tax credit, eligible electric vehicles must have had their final assembly in North America (final assembly requirement), and there is a transition rule for vehicles acquired before August 16, 2022. Those who believe they qualify for this tax benefit can contact the office for more information.