It’s never too early to start getting ready for tax season, especially if your life has undergone a few changes. Here are some things that may affect the way you file taxes for 2022
Tax season is quickly approaching, and with tax laws changing from year to year, it’s important to make sure you are up-to-date on the tax law changes for 2023 when filing your federal income tax return. Changes in the number of dependents, employment or self-employment income, and divorce, among other factors, may affect your tax-filing status and refund for 2022. Here are the top 6 things you should know about taxes this season.
Payment App Reporting Paused For One Year
Payment reporting is paused for one tax year. A recent rule requiring payment applications like Venmo, Cash App, and Paypal to record users’ revenue of $600 or more has caused a lot of misunderstanding. Late in December, the IRS said that it would postpone that rule by one year, requiring those applications to only report income of at least $20,000 for the current tax year. However, people who earn all or a portion of their income via the gig economy are still required to disclose their income to the IRS.
Smaller Refunds Likely
Smaller refunds are likely this tax season and the IRS is reducing various tax credits to reflect levels for 2019. Due to changes in tax law, some taxpayers may receive smaller tax refunds or owe tax due when they file their tax return for 2022.
Tax Credit Available For Some ‘green’ Vehicles
A tax credit may be available for certain new ‘green’ vehicles purchased in 2023. Certain electric, hydrogen fuel cell, and plug-in hybrid vehicles may qualify for a tax credit of up to $7,500.
Making Late Contributions
HSA and IRA contributions that are made between January and April of 2023 can be applied to the prior tax year. Review your eligibility before making a contribution.
Itemized or Standards Deductions
Deciding whether to itemize your deductions or take the standard deduction is an important decision. Depending on your tax situation, you might save money by itemizing deductions instead of taking the standard deduction when filing taxes.
Make Filing Your Taxes Easier
Tax season can be a stressful time, but knowing about the tax laws for 2023 can help make tax filing easier and faster this year. K&B Tax Services keeps up with all the latest tax laws to help you get the most out of your tax return. The filing deadline for 2022 taxes is April 18.
