- Reporting rules changed for Form 1099-K. Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31, 2023, if they received third party payments in tax year 2022 for goods and services that exceeded $600 total. Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially “early filers” who typically file a tax return during the month of January or early February – to be careful and make sure they have all of their key income documents before submitting a tax return.
- The Additional Child Tax Credit returns to up to $2,000 per qualifying child ($1,400 refundable), but the age limit returns to under 17. The credit for qualifying individuals at 17 or over remains at $500.
- The Child Tax, Additional Child Tax, and Earned Income Tax Credits all require that the qualifying individuals live in your home in the United States and must have valid Social Security numbers (no more ITINs). The exception is that children of divorced or separated may be claimed by the non-custodial parent with signed authorization (Form 8332).
- As in past years, all refunds for tax returns that claim the Earned Income Tax Credit (EITC), the Additional Child Tax Credit (CTC), or the American Opportunity Tax Credit (AOTC) may be delayed d by the IRS. Therefore, any refund that includes one of these credits that is prepared in the early part of the filing season may not be deposited until late February.
- If you had health insurance from the Marketplace during any part of 2022, then you will receive Form 1095-A(Health Insurance Marketplace Statement) for each policy you had. This form is mandatory to complete the 2022 Form 8962 (Premium Tax Credit) which calculates your Premium Tax Credit for 2022, and for those who received a subsidy, to complete the reconciliation of the subsidy with the actual credit. If you fail to file this information, your tax return will not be processed by the IRS until the missing information is sent in. This will delay processing by as much as eight weeks.
- All taxpayers eligible for any of the tax credits must answer a few simple questions and provide some type of written proofs that the eligible children lived in their home in the U.S. during 2022. Examples of acceptable documents include school letters, insurance cards and bills or any other document that is dated during 2022 and that shows the child’s name and the taxpayer’s address. Two different forms of proof are required for each eligible child. Without this documentation, the IRS will deny your claim for the credits.
- All taxpayers with foreign accounts totaling over $50,000 are required to file Form 8938 with their taxes. Additionally, any taxpayer with foreign accounts totaling over $10,000 must file Fin Cen 114 (FBAR) with the Treasury Department every year.
- Any ITIN numbers not used in any of the last three tax years must be renewed. These renewals must be made prior to or with the filing of your 2022 tax returns. Those individuals can apply now, so give us a call if you want to save time and to find out the filing requirements. Any required documents must be originals (No copies accepted).
We will be open on Monday, January 16th, but the IRS will not open to begin electronically processing tax returns until January 23rd. If you submit your taxes early, the IRS will hold them and process them on a first come-first served basis once they open. Please call us to schedule your in-person or document drop-off appointment. To be sure you do not incur any extra expenses for tax preparation or any loss of your time, please use the attached checklist for all documents you will need to complete your taxes.