SPRING 2022 NEWSLETTER
March 5, 2022
Dear Clients & Friends,
Spring is right around the corner; Spring sports are starting and it will not be long before the garden will be in bloom. For us, spring also means it’s tax season. In January, we mailed out organizers to our individual clients. If you did not receive one but would like to, please call our office today. Tax deadline for filing individual taxes this year is April 18th. If you haven’t brought in your tax information yet, please do so right away. We try to use the first-in, first-out method when preparing tax returns.
Enclosed, please find our quarterly newsletter. 2022 is shaping up to be a tax year without stimulus provisions. Many deductions and credits are returning to their pre-covid amounts.
The child tax credit is being reduced. In 2021, the child tax credit was $3000 per child ($3600 for children under six.). In 2022, it is back down to $2000 per qualifying child through the age of 16. The monthly advanced payment is no longer available in 2022. The child and dependent care credit is also changing in 2022. If you have one qualifying child, the credit is $1050. For two or more children, the maximum credit is $2100. Many in congress want to make the higher benefits available for 2021 permanent, so we’ll be on the lookout for any future changes.
New reporting change for electronic payments. If you’re receiving electronic payments via PayPal, Venmo, Cash App, etc. and your total amount is equal to or greater than $600, you will receive a 1099-K from each financial institution for 2022. This amount is down from the $20,000 that was in place in prior years.
Reminder, if you own cryptocurrency, transactions will need to be reported on your tax return and you can expect to have the companies that host your electronic wallet to begin reporting transactions in 2022 to the IRS.
The standard deductions are increasing for 2022. For Single, the new amount is $12,950 compared to $12,550 in 2021. Married filing Joint has the highest increase from $25,100 to $25,900. The mileage rate is also increasing from .56 per mile to .58 per mile for business miles and for medical/moving the mileage rate increased to .18 per mile.
Identity Theft Season Starts Now! Please be on the look-out and report any suspicious informalities right away. Some things to watch out for are, if you receive notice of a refund and your taxes haven’t been filed yet or you find out that more than one tax return was filed using your social security number.
Start your 2022 Tax Planning early. Investing in your retirement is a high priority. Properly funding your retirement contributions is also an important part of tax planning. It’s important to note the annual savings limits of your plan and adjust accordingly. If you haven’t already done so you should consider setting up new accounts for a spouse or dependents, review contributions to other tax-advantaged plans like flexible spending accounts and prepaid medical savings plans.
Please call our office if you have any questions concerning tax planning or if you have questions regarding the other information contained in the newsletter. As always, we look forward to assisting you with your tax and financial needs. Thank you for your continued patronage.
Sincerely,
Starkey & Company, PA