Some people may be surprised when their federal tax returns for the 2022 tax years are filed, as pandemic relief measures (including enhanced tax credits) expire.
In a November press release, the IRS stated that refunds could be lower in 2023. Other than the termination of stimulus payments, the IRS announced in November that the 2022 tax season would see changes including the return of tax credits to prepandemic levels and less generous deductions for charitable donations.
The key takeaway:As your prepare your federal return and gather your paperwork, keep in mind the following tax changes for 2022.
Some tax credits take an
The American Rescue Plan Act (2019) valued $1.9 trillion and increased several tax credits. These credits have since reverted back to their pre-pandemic levels. Tax credits can reduce your income tax liability dollar-for-dollar.
Low tax credits
- Child tax credit. If you are eligible, you will get $2,000 for your 2022 tax year if you have $3,600 per dependent.
- Credit for dependent and child care. The maximum amount of this tax credit is $2,100. The maximum tax credit was $8,000.
- Earned Income Tax Credit. Taxpayers with no children and who have received approximately $1,500 in 2021 or 2021 will receive $500 in 2022.
What major tax changes are planned for 2022?
The standard deductions have been increased by the IRS to account for inflation for the tax year 2022. You can’t claim charitable contributions itemized write-offs if you take only the standard deduction.
What You Need to Know
- Standard deductions increase:For 2022 the standard deduction for married couples who file jointly was increased to $25,900. This is an increase of $800 over 2021. It increased by $600 for heads of household to $19,400. It went up $400 for single filers as well as those filing separately if they are married.
- The tax break is over. Single taxpayers could receive up to $300 in cash donations during the pandemic. Married couples could get up to $600 if they file jointly. In 2022, however, taxpayers who have taken a standard deduction will not be able to take an additional deduction for charitable donations. You will need to itemize your deductions if you wish to deduct charitable donations.
When is the due date for federal taxes in 2023?
The Tax Day 2023 has been moved to Tuesday, April 18th, because April 15 (the normal tax day) falls on a Saturday, and Emancipation Day in Washington D.C. the Monday following is April 15.
- Register for a bank account. According to the IRS, the fastest way to receive a tax refund is for the IRS to electronically deposit it into your bank account. You will need a government-issued identification, some personal information, and money to open an account. Credit Karma Money(tm), Spend online checking account, is free to open.
- Get help. Federal Volunteer Income Tax Assistance is designed to assist low- and moderate-income taxpayers with their federal income tax returns. IRS-certified volunteers are available to assist you free of charge if you have a minimum income of $60,000 or meet certain requirements.
- Seek out free options. To see if your eligibility for the IRS Free File program, visit IRS.gov. Taxpayers whose adjusted gross income was less than $73,000 in 2022 are eligible for IRS Free File.