Now that 2022 is coming to an end, the clock is beginning to tick on preparing your 2022 tax returns. Those getting their documents in order to file will want to note a number of changes and updates from the IRS.
Take a look at these important reminders about the Child Tax Credit and a few others.
3 Tax Credits Return to Pre-Pandemic Levels, Meaning Refunds Will Be Lower for Many
Those who received $3,600 per dependent in 2021 for the Child Tax Credit 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 only get $500 in 2022. The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 in lieu of $8,000 in 2021.
1099-Ks for Those Who Got More Than $600
Taxpayers who received more than $600 via third party payment apps (such as PayPal and Venmo) in the tax year 2022 should receive a form 1099-K by January 31. All income, including part-time work, side gigs or the sale of goods is taxable and taxpayers must report all this income.
Last year, 1099-Ks were only issued for third party networks transactions if the total number of transactions exceeded 200 for the year and the aggregate amount of those transactions exceeded $20,000 — so this is a big change.
No Above-the-Line Charitable Deductions
From the onset of the pandemic onward, taxpayers have been allowed to take up to a $600 charitable donation deduction on their tax returns — but that ends this year. Those who take a standard deduction may not take an above-the-line deduction for charitable donations.
Premium Tax Credit
For 2022, taxpayers may still qualify for temporarily expanded eligibility for the premium tax credit.
Clean Vehicle Credit
The Inflation Reduction Act of 2022 may qualify more taxpayers to a clean vehicle credit.
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