Staying up to date with tax law changes can be a challenge, but it is essential for maximizing your tax refund. Last year saw several changes that allowed Americans to take advantage of stimulus-related credits, but these expansions no longer apply in 2022. With TRP guidance, you can stay informed about the credits and deductions you need to know to get back the most money possible this tax season.
New Tax Laws for 2022 Don’t let the changes in tax law confuse you.
- Sell items through digital platforms like Venmo, PayPal, Facebook Marketplace, Etsy, or Poshmark? A new tax rule would have required you to file a 1099-K form if you received more than $600 from any of these platforms. However, the IRS has delayed the 1099-K rule change and the 2021 threshold amounts will generally apply for the 2022 tax year.
- Purchase healthcare coverage through the ACA marketplace (healthcare.gov)? A temporary change in the law allows more people to take advantage of the Premium Tax Credit (PTC) and receive a larger credit. Eligibility has been expanded to those with a household income above 400% of the federal poverty level, who can now receive larger credits due to the lower premiums they must contribute (now between 0-8.5% of their income). The Inflation Reduction Act extends the PTC provisions until 2025.
- Make energy-efficient home improvements? You may be eligible for the Residential Clean Energy Credit, which increased from 26% to 30% for qualified purchases such as solar panels for items purchased between Jan. 1, 2022-Dec. 31, 2032.
- Deal with cryptocurrency? This change in tax law won’t take effect until 2023, but it’s important to start good record-keeping habits now to make tax preparation easier next year. In 2023, crypto exchanges will be required to send Form 1099-B for any sales you make.
Other Considerations Your life changes can also have a significant impact on your tax situation. This year, with the economy and work habits in flux, it’s important to keep the following in mind:
- If you experienced a layoff, you’ll need to know how severance packages and unemployment income affect your taxes.
- If you started working for yourself, it’s crucial to understand how self-employment taxes impact your approach to taxes.
- With rising inflation and increased interest rates, you may be able to take advantage of larger tax breaks for mortgage interest deductions or student loan interest deductions (if you continue making payments during the repayment freeze).
Stay informed and stay ahead of the game with TRP. If you need any help don’t hesitate to contact us.
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