LORRAINE KELLOGG

Tips for the 2022 Tax Filing Season

Tips for the 2022 Tax Filing Season

The Internal Revenue Service announced that the nation’s 2022 tax filing season will start on Monday, Jan. 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.  The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays and later IRS notices. 

As the individual tax filing season approaches, we have compiled some tips that may help the preparer get ready for the upcoming season.  t’s never too early to get ready for the 2022 tax filing season ahead

Special Charitable Donations Tax Deduction

Special Charitable Donations Tax Deduction

As the end of 2021 approaches, the IRS is reminding taxpayers to take advantage of the ability to take a deduction for special charitable donations. Many of our clients may not realize that if they make a cash donation to a qualifying charity before the end of 2021, they can get a deduction of up to $300. Or $600 if the taxpayers are married filing joint.

The best part is that taxpayers do not have to itemize deductions on their tax returns to take advantage of this special charitable donations income tax deduction.

Time to Renew your PTIN

Time to Renew your PTIN

Don’t forget to renew your PTIN before December 31!

Anyone who is paid to prepare or assist in preparing federal tax returns or claims for refund must have a PTIN. All enrolled agents must also have a PTIN. Attorneys and Certified Public Accountants do not need a PTIN unless they are compensated for preparing or assisting in preparing federal tax returns or claims for refund.

IRS Announces 2022 Inflation Adjustments

IRS Announces 2022 Inflation Adjustments

UPDATE DECEMBER 17 – IRS released the Standard Mileage Rates (See Below)

Earlier this week the Internal Revenue Service issued Revenue Procedure 2021-45 which outlines the 2022 IRS Tax Inflation Adjustments. This Revenue Procedure adjusts more than 60 tax provisions, including the tax rate schedules and other tax changes.

These adjustments apply to the 2022 taxation year and will affect returns filed in 2023. The following are a few of the important changes.

Tax Changes for Students and Teachers

As the school year begins, students are considering what classes they need to take and how much the classes will cost. Whether it’s community college, a trade school, a four-year university or an advanced degree, higher education is expensive. The good news is tax deductions and credits can help offset these costs.

These deductions and credits reduce the amount of tax someone owes. If the credit reduces tax to less than zero, the taxpayer could even receive a refund.

Taxpayers who pay for higher education in 2021 can see these tax savings when they file their tax return next year. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.

In addition, teachers are offered a deduction for out-of-pocket expenses that they incur for books and supplies they use in the classroom. 

Identity Protection PIN (IP-PIN) Opt-In Program

The IRS is asking tax professionals to spread the word to their clients about the NEW voluntary IP-PIN program.

IP-PINs are six-digit numbers assigned to eligible taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN.

Tax Related Identity Theft

Tax Related Identity Theft – Protecting Your Tax Data

The Internal Revenue Service issued a News Release this week reminding tax practitioners the importance of protecting your tax data against tax related identity theft. Because the number of data thefts reported by tax professionals to the IRS continued to climb., the IRS launched it’s sixth summer campaign. “Boost Security Immunity: Fighting Against Identity Theft” urges practitioners to boost security immunity.

Cybercriminals target tax professionals because they are custodians of highly sensitive client data. In addition to trying to steal client data, thieves may try to steal your identity as well, using your PTINs, EFINs and CAF numbers to file fraudulent returns or steal even more information.

ADVANCE CHILD TAX CREDIT PAYMENTS TO START JULY 15!

The IRS will begin sending advance child tax credit payments to eligible taxpayers starting July 15. The IRS recently sent letters to over 36 million taxpayers who may be eligible to receive the advance credits. Payments are based on information included in either their 2019 or 2020 federal income tax return or who was a non-filer that registered for an Economic Impact Payment.

Families who are eligible for advance Child Tax Credit payments will receive a second, personalized letter listing an estimate of their monthly payment, which begins July 15.

Become an Annual Filing Season Program Participant

The IRS believes in a mandatory competency standard for federal tax return preparers. To this end, legislation continues to be the priority of the IRS. The Annual Filing Season Program recognizes the efforts of unenrolled return preparers who improve their professional competency through continuing education. Anyone with a PTIN can prepare a federal tax return. However, some preparers with a PTIN work to ready themselves for the filing season through educational efforts, The program differentiates these preparers from the rest of the marketplace.