NEW FOR 2022 TAX FILING!!

Dear client,

Happy New Year!  We hope you and your family are staying healthy and safe.  We are celebrating our 15th year in business and cannot thank you enough for your confidence and support. 

Below are a few of the changes that may or may not affect your tax return.

No above-the-line charitable deductions. During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations.  Charitable deductions are still available for those who itemize.

Some tax credits return to 2019 levels. This means that affected taxpayers will likely receive a significantly smaller refund compared with the previous tax year. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.

  • Those who received $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.

  • For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.

  • The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

  • Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022.

Required Minimum distributions (RMD):  In December 2022 congress passed the secure 2.0 act.  It builds on the Secure Act of 2019 and increased the age of the RMD to 72 and eliminated age requirements for traditional IRA contributions.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be as follows. These rates apply to electric, hybrid-electric, gasoline and diesel-powered vehicles.

  • 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.

  • 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.

  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

  • For business miles please break out your mileage from January - June and July - December    

For additional information on changes for 2022 visit our website – www.nepatax.com and please do not hesitate to call us with any questions and as always, we look forward to seeing you again.

Judith Gregorsky