2022 Tax Updates You Need to Know

Important Tax Filing Questions and Dates to Keep in Mind

When Can I Start Filing Taxes in 2022?

The start of tax season as designated by the IRS began on Monday, January 24, 2022.

What is the Tax Deadline for 2022?

The deadline for filing your taxes in 2022 is October 15th. This is a change from the traditional April 15th deadline, due to the ongoing COVID-19 pandemic. However, you are still able to file for an extension if you need more time. The extension deadline is also October 15th.

Have Tax Brackets Changed for 2022 Filing?

A major change for taxpayers this year is the new tax brackets. The seven income tax brackets that were in place in 2021 have been reduced to six, and the rates have changed slightly. For example, the lowest bracket is now 12%, down from 15% last year. Similarly, the highest bracket is 37%, down from 39.60%.

If I Bought a House in 2021, Do I Get Extra Deductions or Tax Credits?

The short answer is: no. The long answer, though, is more complicated. If you were eligible for the Home Mortgage Interest Deduction (HMD) in 2021, you will still be eligible in 2022. However, there have been some changes to the deduction that may affect your eligibility.

What Should Seniors Have When It Comes to Filing Taxes?

If you’re retired, filing your taxes will look different than if you have a W2 job and there are different steps for tax-filing seniors. There are a few key things to keep in mind:

  • Social Security and Medicare benefits are taxable, so make sure to include them when tallying up your income.
  • If you receive dividends or capital gains, these will also be taxable.
  • You can claim a standard deduction of $12,000 if you’re single or file separately, or $24,000 if you’re married and filing jointly.
  • If you have any questions about how to file your taxes as a senior, the IRS has a plethora of resources available on their website.

Minimize your Total Income from Retirement Plans (pre tax)

If you have money in a pre tax account, such as a 401(k) or employer-funded pension funds, your withdrawals from these plans after you retire are usually subject to income tax. Finally, the tax rate you pay is determined by your entire taxable income for the year. If you have multiple sources of retirement income, limiting distributions from pre tax plans to only the amounts you require or are penalized for withdrawing in retirement saves on your taxes.

What If I Owe Taxes?

Often, filers are surprised that instead of a refund they in fact owe money to the IRS. If you find yourself owing and are not sure how to pay the money, read Can’t Pay Your Taxes? Here Are 5 Tips to Pay the IRS to put together a payment plan.

  • Try to estimate your taxes as accurately as possible, so you don’t end up owing a lot come April. You can meet with an initial consultation with a financial tax advisor or accountant and they can take a look at your finances and see if you are on track.
  • Pay attention to tax law changes, which can affect how much you owe.

Work with a Tax Preparer to Ensure Accurate Tax Filing

If you own a business, are retired, have multiple jobs, multiple 1099s, or other types of complicated tax paperwork, you will likely need to file taxes with a preparer. You can find free tax preparation options through the IRS or AARP, but be sure to shop around and compare services before you choose one. Finding a fiduciary financial advisor or tax account can take all of the guesswork out of your taxes. Many opt to hire an account so that they don’t have to worry about ensuring that their filings are correct. For many, this is a smart option to avoid any unnecessary complications or issues with the IRS.

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