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This article outlines the Tax Law Changes for Tax Year 2022. |
Tax Law Changes for 2022
Educator Expense Deduction
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2023. |
Third-Party Network Transactions (1099-K) Reporting Requirements
Beginning with tax year 2023, individuals who receive $600 or more through a third party network transaction will receive Form 1099-K (this was intended to be 2022 but IRS has delayed to tax year 2023)
This includes apps such as Venmo, Uber, Lyft, Cash App, Zelle, PayPal, E-bay, etc.
Taxpayers must report Form 1099-K on their tax return as income if the funds were received for the sale of goods and services
If amounts on Form 1099-K are incorrect the taxpayer should contact the issuer
If taxpayer receives an incorrect 1099-K, they must contact the issuer, not the IRS
Standard Business Mileage Rates
58.5 cents per mile (Jan – June)
6265.5 cents per mile (July – December)
Standard Deductions Adjusted For Inflation
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Provisions That Revert to Prior 2021 Rules
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Child Tax Credit
Child tax credit reverts to the $2,000 maximum amount ($1,500 600 refundable Additional Child Tax Credit)
Qualifying children must be younger than 17 on December 31st of the tax year
Earned income requirement returns ($2,500)
Child and Dependent Care Credit
Reverts to nonrefundable credit status
Credit worth up to 35% of qualifying expenses for taxes with AGI under $15,000
Maximum qualifying expenses are $3,000 (one qualifying person), $6,000 (two or more qualifying persons)
Recovery Rebate Credit/Stimulus Payments
Not available for tax year 2022
Earned Income Credit
Age limits for taxpayers claiming EIC without children return to 25-65
Inflation Reduction Act Provisions That Apply To Tax Year 2022
Alternative Fuel Vehicle Refueling Property Credit (Form 8911)
Maximum credit $1,000 (personal residence), $30,000 (business)
Available for qualified alternative fuel vehicle refueling property installed tax years 2022-2032
Extended through tax year 2032
Plug-In Electric Drive Vehicle Credit (Form 8936)
New rules do not take effect until 2023
Manufacturing caps still exist
Third-Party Network Transactions (1099-K) Reporting Requirements
As of December 23, 2022 the IRS has delayed the new $600 limit to Tax Year 2023.
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Beginning with tax year 2023, individuals who receive $600 or more through a third party network transaction will receive Form 1099-K (this was intended to be 2022 but IRS has delayed to tax year 2023)
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This includes apps such as Venmo, Uber, Lyft, Cash App, Zelle, PayPal, E-bay, etc.
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Taxpayers must report Form 1099-K on their tax return as income if the funds were received for the sale of goods and services
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Clean Vehicle Credit (Form 8936)
Replaced the Plug-in Electric Drive Vehicle Credit
Nonrefundable credit
Does not carry forward to future tax years
Maximum amount of $7,500 (new vehicles) $4,000 (used vehicles)
Qualifications
Vehicles must be for your own use (not for resale)
Vehicle must be mainly used in the United States
MAGI can not exceed $300,000 (MFJ), $225,000 (HOH), $150,000 (all others)
Truck, Van, SUV must be $80,000 or less, all other vehicles must be $50,000 or less
Final assembly must have been in North America
Vehicles placed in service after April 18, 2023 must meet critical mineral requirement/critical battery requirement
When the vehicle is purchased, the seller MUST give the taxpayer information regarding qualifications. Sellers must also register online and report the information to the IRS. If this does not happen, the vehicle is NOT eligible for the credit.
To see the full list of requirements navigate here: https://fueleconomy.gov/feg/tax2023.shtml
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For a full list of limits and dollar amounts adjusted for inflation in tax year 20222023, refer to the Tax Toolkit. |