The IRS have published updates in preparation for filing your 2022 tax return. Here we bring you the most relevant and up to date information.
Child tax credit
The advance child tax credits that were issued for tax year 2021 (for US residents only) were a one-time event and will not be repeated in 2022. Similarly, the enhanced child tax credit for dependents under 6 and over 18 years of age has expired. This means that only qualifying children under the age of 17 are eligible for child tax credit, which remains $2000.
The refundable portion of child tax credit is $1500 in 2022, an increase from the $1400 non-US citizens were eligible for in 2021.
The credit amount begins to phase out where modified adjusted gross income exceeds $200,000 and $400,000 in case of a joint return.
Credit for child and dependent care expenses
The changes to the credit for child and dependent care expenses implemented by the American Rescue Plan Act of 2021 (ARP), were not extended. For 2022, the credit for the child and dependent care expenses is nonrefundable. The dollar limit on qualifying expenses is $3,000 for one qualifying person and $6,000 for two or more qualifying persons. The maximum credit amount allowed is 35% of your employment-related expenses.
Standard deduction amount
The standard deduction amount has been increased for tax year 2022. The amounts for taxpayers filing as Single or Married filing separately is $12,950. Married filing jointly or Qualifying surviving spouse are eligible for a deduction amount of $25,900. Head of household deduction is now $19,400.
Due date of return
Individual tax returns, Form 1040 or 1040-SR are due by April 18, 2023. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia – even if you don’t live in the District of Columbia. US citizens who live abroad have an additional two months to file until June 15, 2023.
New lines 1a through 1z
This year line 1 on Form 1040 and 1040-SR is expanded and there are new lines 1a through 1z. Some amounts that in prior years were reported on Form 1040 and Form 1040-SR are now reported on Schedule 1.
The Internal Revenue Service announced Monday, January 23, 2023, as the beginning of the nation’s 2023 tax season when the agency will begin accepting and processing 2022 tax year returns. The IRS claim to have reduced their backlog of returns substantially and we hope to see an improvement in processing this tax season. As always, e-filing ensures your return is processed faster than paper filing.
