Tax season 2022 Tips & Advice from the Experts

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With tax season now beginning, experts are urging taxpayers to expect more delays and hassles this year, emphasizing the need of filing early and carefully preparing your information.

On Jan. 24, the Internal Revenue Service (IRS) began taking 2021 tax returns, more than two weeks ahead of last year’s filing deadline. The deadline for most taxpayers is April 18, but the IRS faces a long road ahead. At the same time as significant personnel shortages and a backlog of unprocessed paper returns running into the millions, coronavirus stimulus checks and scaled-up child tax credit payments are adding to IRS officials’ workload.

Here’s everything you need to know about filing your taxes, preparing your return, and receive your refund as soon as possible.

When will tax reform affect my taxes?

Tax law is changing every year, we may not hear about it, but it’s constantly evolving. The last significant tax reform was the Tax Cuts and Jobs Act when President Trump was in office back in 2017. This provision impacted many different aspects of taxation, but two changes were felt the most by Taxpayers.

1. QBI – This new provision, also known as Section 199A, allows a deduction of up to 20% of qualified business income for owners of some businesses.

2. Standard deduction increase – The Tax Cuts and Jobs Act (TCJA) increased the standard deduction from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for joint returns, and from $9,550 to $18,000 for heads of household.

President Biden has also changed up Tax law during his presidency. One of the changes causing the most stress this tax season is the Advanced Child Tax Credit (ACTC). The ACTC gave some taxpayers with children an “advance” of their tax refund. This means some taxpayers are getting a smaller refund than they’re used to because they already received some of it throughout 2021.

Crypto investors listen up; the IRS is getting stricter. The Infrastructure bill that President Biden signed into law induces updated Crypto regulation. Beginning with the 2023 tax year, Cryptocurrency exchanges will be required to collect taxpayer identifying information from their customers to properly issue Forms 1099 at the end of each tax year. Previously cryptocurrency exchanges did not need to collect and report that information.

Tax law is constantly changing every year; the best way to stay on top of the updates and have a stress-free tax season is to go to a trained credentialed tax prepare.