Fleming Financial Services
2022 Tax Law Notes
Filing Date Startup - TBA
January 31, 2023 – all W-2s and 1099s must be distributed
March 15, 2023 – Calendar Year Business Tax Returns due
April 18, 2023 – Personal Tax Returns due
October 16, 2023 – Extended Personal Tax Returns due
Tax Law Changes for 2022
- The Child Tax Credit has reverted back to the pre-2021 amount ($2,000)
- There were no Stimulus Payments in 2022, so we will not have to account for any on
- your tax return
- The ability to deduct up to $300 for a cash or check donation to a qualified charity if you
- do not itemize your deductions is no longer available
Changes in the Tax Rate Schedule
The Tax Rate Schedule has been adjusted for inflation
Exemptions are no longer allowed
Additional Due Diligence for Tax Credits for Children and Other Dependents
The IRS continues to require Tax Preparers to check to ensure that credits for Child Tax Credit, Additional Child Tax Credit, Credit for Other Dependents Earned Income Credit, American Opportunity Tax Credit (college tuition credit) and Head of Household Filing Status are legitimate.
What you need to bring with you is proof that the children are your dependents and living with you. A Tax Preparer is subject to hefty fines without that documentation.
The IRS has started to audit tax returns to ensure the amounts that the colleges are putting on the Form 1098-T, is what the Taxpayer actually paid during that year. If you are able to claim these types of Tax Credits, whether for Taxpayer or their children, please bring with you proof of payment for tuition, books and any other college costs.
This payment information may be available on the college website. That payment information and Form 1098-T from the school are both needed to get the credit.
Another reminder, if your child for whom you are taking College Education Credits also worked during 2022, and they file their taxes before you do, please make sure that they do not claim themselves as a dependent on their Tax Return.
Affordable Health Care Act
If the Taxpayer received Premium Tax Credit, the Taxpayer need to bring your 1095-A to make sure that is calculated properly.
This continues to be a major problem and IRS suggests:
- If you think you are a victim of Identity Theft
o Report it at www.identitytheft.gov which is a Federal Trade Commission
o Contact your Tax Preparer
- If you become a victim of Identity Theft, contact one of the major credit bureaus and
put a “fraud alert” on your credit account
- Respond immediately to any IRS Notice
- Complete IRS Form 14039, Identity Theft Affidavit
- File your tax return by paper and pay any taxes due
- The IRS does not call you unless they have sent you a Notice in the mail
- The IRS does not initiate contact with taxpayers by email to request personal
or financial information (this includes any type of electronic communication,
such as text messages and social media channels)
- Don’t give personal information over the phone, through the mail or the
Internet unless you have either initiated the contact or are sure you know who
Medical Expense Deduction
If you can itemize deductions, the Medical Expense Deduction has changed to 7.5 % of your Adjusted Gross Income for Taxpayers.
Charitable Giving with your IRA Distributions
Individuals age 70 ½ or older can continue to be able to exclude from gross income their
Required Minimum Distributions up to $100,000 of Qualified Charitable Distributions. This law is now permanent.
State of Michigan Changes
There has not been any changes for the State of Michigan.
First Time Homebuyers Pay Back Continues
If you took advantage of the First Time Homebuyers credit in 2008, you have to continue the fifteen year pay back in 2022. Those that fall into this category had to purchase their homes during 2008.
The standard mileage rates for 2022 were:
- Business –
o 58.5 cents per mile for January through June
o 62.5 cents per mile for July through December
- Medical and Move Related – 18.0 cents per mile
- Charitable – 14.0 cents per mile
Property Taxes Paid on your Home
The property taxes paid on your home in 2022 are deductible in most cases if you are able to itemize your deductions. There are different calculations dependent upon whether you are filing Federal or State Tax Returns:
o If you itemize your deductions, the full amount paid in 2022 may be
o May be eligible for Homestead Property Taxes for the amount assessed
(whether paid or not) in 2022
If you are not able to itemize your deductions, you are no longer eligible to receive a $300 charitable giving deduction.
If you are able to itemize your deductions, please provide me with the following documentation:
- Cash or Check – statement from Charity showing any gift over $250
- Other Giving, in addition to a receipt from the organization, include the following:
o listing of what was given and/or pictures of what you gave
o the condition of given items
o value of the given items
Foreign Financial Accounts Reporting
Anyone with foreign financial accounts or foreign trusts that exceed $10,000 in value is required to complete the IRS form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts). There are major penalties for not filing this form.