07/20/2022
As 2022 comes to an end, there are some changes to the tax laws that you may want to be aware of.
1- Child Tax Credit roll back. In 2021 the amount for a qualifying child was $3600. This year that credit rolls back to 2020 limits of $2000 per qualifying child.
2- Dependent Care Credit qualified expense is now lower. In the tax year 2021, the credit was $8000 for 1 and $16000 for 2 or more. The tax year 2022 qualified childcare expenses are now $3000 for 1 child or $6000 for 2 or more.
3- Reporting of digital payments expand dramatically. If you receive more than $600 in digital payments and the IRS deems it as business-related, you will receive a 1099K in January. So, if you use reseller platforms such as Venmo, PayPal, and the likes, be on the lookout for your 1099K and expect to have a slightly more difficult tax return this next tax season. When sending funds via these platforms make sure to note what the payment was for, you don't want payment for dinner to end up as income on a tax return.
4- Increased Tracking of virtual currency. More stringent reporting of cryptocurrency transactions to the IRS by brokers and dealers begins in 2023. However, many of these brokers and dealers are starting to report to the IRS in 2022 to ensure they are compliant before it becomes mandatory. Watch out for those 1099's to come in January if you deal in virtual currency.
5- Charitable deduction for taxpayers who don't itemize will no longer be available in 2022.
If you have any questions or concerns, you can always contact us via phone, text, or email
