Tax Changes for 2022

By Alice Horton-Barr, CEO, Honest Abe's Taxes, Inc.

Congress had not decided all of the tax changes before 12/31/22 and although some changes may have come after that date, even into this year, below is a summary of the ones that they had decided on that do affect your 2022 taxes in comparison to prior years.

Over the last two years taxpayers had an “above the line” deduction for charitable deductions and that is gone. Also, over the last two years Earned Income Credit was sometimes calculated using prior year income, if higher, rather than your current year lower income, but that also is gone.

Stimulus recapture is gone. Stimulus is gone. Early Child tax credit dollars recapture is gone. Earned income credit was for age 25-65, historically. For 2021 the age minimum was 19 with no maximum age, however, for 2022, the age bracket went back to age 25-65.

Taxpayers may be receiving 1099K’s from Venmo, CashApp, etc. if you received more than $600 from them during the year. If this was for business income and you have reported the income on your tax return you good, if not, you must report the income. If this was not for business income you will have to find a way to prove the dollars received was not for business income. Child Tax Credit has reverted to $2000 per child for children under 17, not under 18, as it was temporarily for 2021. The refundable portion will be $1500. Mileage rates increased in July due to the costs of gas, so you will need to figure your miles for January through June and July through December. The rates are for the first half of the year business $0.585 and the second half $0.625; medical and moving for the first half of the year $0.14 and the second half $0.22; and charity remained all year at $0.14 per mile.

Honest Abe’s looks forward to helping all customers in the upcoming season with continued quality service and support. We are open year-round and continue to offer better pricing to the community. We welcome new customers as well as our family of prior customers. Call to make your appointment today, 570-668-8297.