Thanks to all our returning clients for your support during our physical move of the storefront. It was a challenge, but we are all settled in! And as usual, we are once again here to make your tax filing as stress-free as possible. We remain grateful to serve you and thankful for the opportunity to engage.
As always, each new year brings tax law changes. Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31, 2023, if they received third party payments in tax year 2022 for goods and services that exceeded $600. Prior to 2022, Form 1099-K was issued for third party networks transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially “early filers” who typically file a tax return during the month of January or early February – to be careful and make sure they have all their key income documents before submitting a tax return. There’s no change to the taxability of income. All income, including from part-time work, side jobs or the sale of goods is still taxable. Taxpayers must report all income on their tax return unless it’s excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Nonemployee Compensation, or any other information return. Also, some tax credits will return to their 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. This includes the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and the Child and Dependent Care Credit.
- Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.
- For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.
- The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
Lastly, there will be no above-the-line charitable deductions for 2022. During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns without itemizing. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations.
The IRS will begin accepting and processing 2022 individual tax returns January 23rd at which time we will also extend our storefront hours. The IRS continues to remind taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. This applies to the entire refund − even the portion not associated with the EITC or ACTC. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts by the first week of March, if the taxpayer chose direct deposit and there are no other issues with the tax return.
To help offset any additional charges you may encounter due to tax law changes, and to help ensure all returns are submitted by the deadline, we are offering discounts on our tax preparation for early drop offs. The discounts are as follows:
25% through FEBRUARY 28
10% from MARCH 1 – MARCH 31
NO DISCOUNTS WILL BE GIVEN FOR TAX DOCUMENTS RECEIVED AFTER MARCH
If you drop off your tax documents by February 28, 2023, you will be eligible for the 25% discount even if you must submit more documents/information later. In short, the earlier we receive your tax information, the earlier we can start, and the better your discount. Please call or email for appointments.
Thank you, as always, for your continued business and we look forward to seeing you again this year.
Many happy returns,
Austin Tax Services
1300 West Koenig Lane, Suite 230
Austin, TX 78756