At Global Web Wire we explain what you should take into account to file your tax return for tax year 2022, as well as the amount in which some tax credits will remain.
The date of the 2022 federal tax return in the United States is approaching. For this reason, the Internal Revenue Service (IRS) recently published a series of important reminders that taxpayers should keep in mind when making their tax filings.
At Global Web Wire we tell you what you should take into account to make your 2022 tax return.
1- The reporting rules for Form 1099-K changed
According to the IRS, U.S. taxpayers must receive Form 1099-K (Third-Party Network and Payment Card Transactions) by January 31, 2023, if they received third-party payments in the past. tax year 2022 for goods and services that have exceeded $600 dollars.
Money received through third-party payment networks from friends and family as personal gifts or reimbursements for personal expenses is not taxable.
This marks a change from the use of Form 1099-K prior to 2022, when this form was only issued for third-party network transactions only if the total number of transactions exceeded 200 per year and the total amount of these transactions exceeded the $20,000 dollars a year, something that changed with the American Bailout Act of 2021.
2- Some tax credits return to 2019 levels
This means that taxpayers will likely receive a significantly smaller refund compared to the prior tax year.
According to the IRS, here are some tax credits coming soon:
1) Those who received $3,600 per dependent in 2021 for the Child Tax Credit, if eligible, will now only receive $2,000 for tax year 2022.
2) For the Earned Income Tax Credit (EITC), taxpayers without children who received approximately $1,500 in 2021 will now receive $500 in tax year 2022.
3) The Child and Dependent Care Credit will grant a maximum of $2,100 in 2022, a decrease from the amount in 2021, which is $8,000.
3- More people may be eligible for the Premium Tax Credit
For 2022, eligibility for the Premium Tax Credit will still remain temporarily extended, so many taxpayers may still qualify.