Keep your eyes peeled this month for a webinar related to the 2022 tax law changes you and your team need to be aware of.
While major legislation is not expected before year-end, unlike the past several years, some changes are taking place for 2022 returns and it is important to know which ones will impact your clients.
Key changes to start taking note of now for incorporation into year-end tax planning:
- Changes to child tax credits and dependent care credits — The boosts to these credits were only temporary for 2021 and so far have not extended to 2022, make sure your 2022 projections include a downturn in these amounts. The dependent care credit is also not refundable for 2022
- Earned income credits down, too — Similar to the child tax and dependent care credits, the earned income credit was temporarily increased for 2021. Those inflated income limits expire and decline again for 2022.
- Income rates adjusted for capital gains — While the Biden administration has yet to be successful in changing the capital gains tax rates, the income limits for each bracket of capital gains was adjusted for 2022. Income limits were also adjusted for the 3.8% net investment income additional tax. Make sure in your planning you know where your clients fall within the brackets.
- Residential energy credits increased — The Inflation Reduction Act of 2022 helped to raise the percentage of these credits and extend their stay until 2035.
- Mortgage insurance premiums deduction is dropped — This tax extender has not received a vote to stay in 2022
- Self-employed sick pay — During the pandemic, tax credits were available to self employed individuals who could not work if they, or a family member were sick. Similar to that, family leave would have afforded an employee. This benefit was not extended to 2022.
Join us for a more in-depth look at 2022 tax law changes during our November webinar.
