2022 Tax law changes: What to know about to maximize your refund
Taxes laws change each year, and it can be tough to keep up. Last year, a host of tax law changes let Americans tap into several stimulus-related credit expansions. This year, these expansions no longer apply.*
So, what credits and deductions should you know about so you get back the most money possible this tax season?
And, if you’ve heard rumblings about money received via platforms like Venmo, Facebook Marketplace, or others, affecting your taxes — you’ll want to get all the details about what this change in tax law for 2022 means for you.
The good news is that H&R Block has got you covered. Check out the need-to-know 2022 tax law changes below.
Tax law changes for 2022
Don’t worry — you won’t need to have a tax law degree to follow what changes could affect you. Instead, check out the situations below and see what’s relevant to your life.
In 2022, did you…?
- Receive money or sell items via apps or digital platforms such as Venmo, Paypal, Facebook Marketplace, Etsy, Poshmark? Due to a new tax rule, if you received more than $600 from any one of these types of platforms, they’ll send you a tax form (called 1099-K) in January. Whether you owe taxes will depend on your situation. For example, personal transactions and hobby income aren’t handled the same. However, regardless of what triggered your 1099-K, you’ll likely need to report it on your return. Don’t worry, we’ll help you sort out what’s taxable and not taxable.
- Buy healthcare coverage from the ACA marketplace (heathcare.gov)? A temporary rule change lets more people take the Premium Tax Credit (PTC) and receive a larger credit when they do. The temporary law expands eligibility to those with a household income above 400% of the federal poverty level. Those eligible can receive larger credits due to the lower premiums that households must contribute (now between 0-8.5% of their income). Note The Inflation Reduction act extends PTC provisions until 2025. They were previously scheduled to expire after 2022.
- Make energy efficient home improvements? You may be eligible to take advantage of the Residential Clean Energy Credit, which increased from 26% to 30% of qualified purchases such as solar energy panels and solar water panels (for items bought between Jan. 1, 2022-Dec. 31, 2032).
- Transact with cryptocurrency? OK, this is really a 2023 tax law change, but we’re mentioning it here so you can start the new year with good recordkeeping habits and make next year’s tax prep that much easier. For 2023, crypto exchanges will be required to send Form 1099-B for any sales you make. Find out more about crypto tax considerations.
Beyond tax law changes: What else should you consider?
As in any tax year, your life changes can have a big impact on your situation. This year, there’s a lot going on in the economy and shifts in work habits that might affect you.
For example, if you:
- experienced a layoff this year, you’ll want to know about how severance packages and unemployment income affect your taxes.
- started working for yourself in the last year, it’s important to understand how self-employment taxes change how you approach taxes.
Also related to the current economy is rising inflation and increased interest rates. The silver lining of higher interest rates is that you may be able to get larger tax breaks for things such as the mortgage interest deduction or student loan interest deduction (if you’ve continued to make payments during the repayment freeze).
Getting your maximum refund, even if tax law changes don’t apply to you
Did you answer “no” to all of the above? Fear not! You may still be able to lower your tax bill with other tax benefits with the expertise of H&R Block on your side.
*Additional credits included Recovery Rebate credits and increased Child Tax Credits, Earned Income Credits (which have both returned to previous amounts).
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