What to Expect: 2022 Tax Year Guide
We’re doing things a little differently this year— including how we communicate with our clients and the contents of our messages. We will be gradually phasing out old communication systems, so please forgive any overlap as we incorporate our new systems. We hope these new tools will enhance security & simplify an already complex tax process as well as give you more client options. Below is some useful information for 2022 tax return planning. All R&G Brenner offices are currently open, so if you have any questions, please feel free to contact us.
Increased IRS Staffing:
IRS hires 4000+ employees to help taxpayers: This is welcome news to any taxpayer who needs to reach a live human being at the IRS. Waiting on hold for hours before being disconnected is a common story. Read more.
IRS hiring 10,000 employees including additional auditors: In not-so welcome news, $45.6 Billion of the $80 billion in recent funding to the IRS has been allocated for “enforcement”--which translates to additional auditors and audit technology. We expect to see an increase in correspondence and “desk” audits this tax season and the immediate future. Please keep your tax records organized. Read more.
IRS Credit & Processing Delays
EITC & CTC Delayed: The IRS is again delaying the processing of the Earned Income Tax Credit (EITC) & the Child Tax Credit (CTC) until February 16th. Returns with these credits may be filed before this date, but will not be processed until 2/16/23. Read more.
IRS Return Backlog: The IRS has over 12,000,000 backlogged tax returns–larger than last year’s backlog. This means more refund delays. The best way to combat delays is to file a complete return as early as possible–even if your credits are delayed. Read more.
Refund Advance Options:
Up to $6,000 Easy Advance: If you don’t want to deal with or can’t afford all the delays again, refund advances are currently available. Application & rules apply. Read more.
New Cryptocurrency Requirements & Information:
IRS Crypto Reporting Requirement: Starting in 2023, Crypto exchanges & brokerages will be required to report customer information directly to the IRS as well as the customer (similar to stock transactions). Furthermore, taxpayers will be required to answer “Yes” or “No” on their tax return if they bought or sold any “digital assets”. Read more.
FTX & Other Bankrupt Cryptocurrencies: For taxpayers who have assets locked up in FTX or other bankrupt crypto, you will not be able to write off any losses until the bankruptcy process is completed–and that could take years. Read more.
IRS Inflation Adjustments:
There have been numerous IRS deductions, credits & tax law changes that will take effect this tax year.
Some notable changes are:
Standard Deductions: Single: $12,950 (+$400) Married: $25,900 (+$800) HOH: $19,400 (+$600)
Alternative Minimum Tax Phase In: $75,900 (+$3,884)
Max Earned Income Tax Credit: $6,935 (+$207)
Foreign Earned Income Exclusion: $112,000 (+$3,300)
Annual Exclusion for Gifts: $16,000 (+1,000)
Click here to see all IRS inflation related changes.
New Form 1099-K Reporting Rules:
The new form 1099-K requirement for “side hustles” exceeding $600 has been delayed. This is welcome news for hundreds of thousands of taxpayers. Read more.
Clean Vehicle Eligibility Rule Changes:
As of August 2022, in order to claim the Electric Vehicle (EV) credit, final assembly of the EV must be completed in North America. Read more about EV credit requirements.
