While there has been talk for many years about the possibility of a flat tax or tax returns the size of a postcard, that is not yet the reality. Instead, the tax code has continued to change, evolve and become even more complicated. Every taxpayer’s situation is unique and we are always ready to assist you with individual consults, but the following are changes for 2022 that are most likely to affect you.

• Itemized Deductions—The standard individual deduction for 2022 increases to:
  • $12,950 single filers (+$1,700 for age 65+ single filers)
  • $25,900 joint filers (+1,350 for age 65+ joint filers)
  • $19,400 Head of Household)
  Most people are no longer able to itemize deductions since larger standard deductions were introduced a few years ago. Self-employed individuals, especially those with home offices, may continue to find itemizing beneficial.

• Charitable Contributions—The $300 charitable contributions deduction was not extended for the 2022 tax year, so unless you itemize, you will be unable to claim cash contributions.

• Capital Gains—The Capital gains rate is 0% for filers whose income does not exceed $41,675 for single filers and $83,350 for joint filers. A 15% rate applies to single filers with income up to $459,750 and joint filers up to $517,200.

  For 2022, the maximum qualifying income for single filers with no children is $16,480 for a credit of up to $560, as long as investment income does not exceed $10,000. For those with dependent children, the allowed maximum income is higher. *By law, EITC refunds cannot be sent prior to mid-February.*

• Child Tax Credit—This tax credit has reverted back to $2,000 per child for dependents under age 16 with an income threshold of $200,000 ($400,000 for joint filers). This credit is available only for filers who lived with their child inside the U.S. for more than half the year. If you qualified for and missed out on the expanded credit in 2021, you may still be able to claim the credit, but only if you file a tax return.

• The ACA and Healthcare—The individual mandate was removed in 2019 so only those with Affordable Care Act health plans are required to report their healthcare coverage. Because these plans are reconciled with your income on your taxes, it is important to accurately estimate your income if you accept subsidies toward your ACA health coverage. Review your subsidy annually with healthcare.gov for accuracy, as you will be required to repay any subsidy overpayments at tax time. If you received a subsidy for your ACA plan, you must send your taxpayer the form 1095-A statement from the Marketplace.