Kehrt + Associates
News
We post updates and information here that may be
beneficial to you.
What’s New for 2022:
The child tax credit reverts back to pre-2021 rules:
Which means the maximum credit drops from $3,000 per child under the age of 18 ($3,600 for each child under age 6) back to $2,000 per child under 17 for 2022. The credit is also no longer fully refundable.
Expansion of the higher earned income tax credit for workers without children and the larger child and dependent care credit for working parents has decreased.
For 2022, the maximum credit amount falls back to $1,050 for one child and $2,100 for two or more children needing care. This is down from the top 2021 credit of $4,000 for one child and $8,000 for two or more. Also, the income phaseouts for credit eligibility reverts to pre-2021 figures.
Beginning with the 2022 returns, nonitemizers can no longer write off up to $300 in cash donations paid to charity.
60% of AGI limit on charitable gifts of cash by individuals is also back.
Many tax extenders expired at the end of 2021.
Schedule A deduction of home mortgage insurance premiums, the limited credit for energy-efficient windows and doors added to one’s residence.
The standard deduction for 2022 for married couples has increased to $25,900 plus $1,400 for each spouse 65 or older.
Singles can claim $12,950 – $14,700 if age 65 or up. Heads of household get $19,400 plus $1,750 once they reach 65.
Tax rates on long-term capital gains and qualified dividends do not change.
But the income thresholds to qualify for the carious rates go up for 2022.
The Social Security annual wage base for 2022 is $147,000.
May key dollar limits on retirement plans and IRAs are higher in 2022. The maximum 401(k) contribution is $20,500. People born before 1973 can contribute an extra $6,500. The cap on SIMPLEs ticks up to $14,000.
These are just a few of the changes! More changes are sure to come in 2022. Just this month, IRS increased the mileage rate for the final 6 months of 2022 from 58.5 cents to 62.5 cents for business mileage and medical/moving the rate increased from 18 cents to 22 cents. Charitable mileage remains unchanged as it is set by statute.
This is a quick summary of some of the federal tax changes that may affect your tax situation. If you have any questions or concerns, please contact me at 859-224-4688. I am happy to go over your particular situation and see if there is anything we can do to diminish your tax liability.