It’s a new year and that means new tax laws and other tax changes. Below are changes that take effect this year, along with other tax planning information.
Filing deadlines
First off, the deadline to file individual tax returns is April 18. Other deadlines are:
January 17, 2022: 4th quarter 2021 estimated tax payment due
March 15, 2022: Partnership and S corporation returns for calendar year 2021
April 18, 2022: 1st quarter 2022 estimated tax payment due
April 18, 2022: Last day for individuals to make a 2021 IRA contribution and C corporation tax returns for calendar year 2021
May 16, 2022: Not-for-profit returns for calendar year 2021
June 15, 2022: 2nd quarter 2022 estimated tax payment due
September 15, 2022: 3rd quarter 2022 estimated tax payment due
October 15, 2022: Extended individual tax returns due
January 15, 2023: 4th quarter 2022 estimated tax payment due
Tax brackets and other inflation-adjusted numbers
For all the 2022 inflation-adjusted tax brackets and other inflation-adjusted numbers, see the official inflation-adjusted tax rate schedule and other key tax figures for 2022 within the Checkpoint platform.
Reporting by third party settlement organizations
Congress has tightened the de minimis exception to tax reporting by third-party settlement organizations (TPSOs, e.g., PayPal, Venmo, Zelle) by requiring reporting of transactions that exceed $600 (and eliminating the 200-transaction threshold). The American Rescue Plan Act (ARPA) also clarified that TPSO reporting obligations are limited to transactions involving goods and services. This means that, beginning in 2022, if you run a business where customers pay you via a TPSO, and you receive more than $600 in total during the course of the year via a TSPO, the TSPO is required to report that amount to the IRS – regardless of how many customers are paying you – and to send you a Form 1099-K, Payment Card and Third Party Network Transactions.
Charitable deductions
The Taxpayer Certainty and Disaster Tax Relief Act of 2020 extended two charitable giving changes enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law allows you to deduct up to 100% of your adjusted gross income (AGI) in qualified charitable donations if you plan to itemize your deductions. Nonitemizers, i.e., those taking the standard deduction, may claim an above-the-line deduction of up to $300 ($600 for married filing jointly) for charitable contributions made in cash.
Child tax credit
The big change in 2022 is that both the advanced payment of the child tax credit (CTC) and the extended CTC comes to an end in 2022. For more details, see IRS to mail information letters to advance child tax credit recipients within Checkpoint.
But the effects of the advance payment of the CTC during 2021 will still be around in 2022. Families who received advance payments will need to compare those advance with the amount of the CTC that they can properly claim on their 2021 tax return. Taxpayers who received less than the amount for which they’re eligible can claim a credit for the remaining amount of CTC on their 2021 tax return. Taxpayers who received more than the amount for which they’re eligible may need to repay some or all of the excess payment when they file.
To determine if a taxpayer has to repay some or all of the excess payments, see the IRS FAQs on Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return within Checkpoint.
The IRS will send Letter 6419 with the total amount of advance CTC taxpayers received in 2021. People should keep this and any other IRS letters about advance CTC payments with their tax records.
Stimulus payments and recovery rebate credit
If you didn’t qualify for the third economic impact payment-commonly referred to as a “stimulus check”-or didn’t get the full amount, you could be eligible for the Recovery Rebate Credit. You’ll need to file a 2021 tax return, even if you don’t usually file, to claim the credit. The IRS will send Letter 6475 in early 2022, which contains the total amount of the third stimulus payment.
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