BUFFALO, N.Y. (WKBW) — 2022 is known as the year of the great reset.
The tax season will look different than last tax years but will look a lot different than 2021’s tax year.
For starters, many can expect to have a skinnier check this time around and those who have side gigs may be paying a little more.
2021 saw the advance of many tax law changes to help people out during the pandemic, all in an attempt to help people get more out of their single biggest payday: their tax refund.
“The child tax credit was nearly doubled, earned income was nearly tripled, the dependent credit went up, other deductions for charitable donations were nearly doubled even if you didn’t itemize,” Jackson Hewitt chief tax information officer, Mark Steber said.
Jackson Hewitt chief tax information officer Mark Steber said this year will be a little.
“If you’re looking at last year, your barometer or what to expect, you could be faced with a refund or shock, or n worst, a balance due situation and you don’t want that so it’s important to start early. It’s important to get help where you need it,” Steber said.
Another change that happened about two years ago with a future effective date of January 1, 2022 were people who have side gigs or freelance work and got paid through electronic platforms like Venmo, Apple Pay or Paypal.
According to TurboTax, payers should send out 1099-K forms by January 31 which states that state the dollar amount you earned and if they withheld anything from your payments.
“If you’re an online vendor, or really any type of person that gets paid through electronic funds transfer and you get more than $600, this year you’ll be getting a statement that will tell you how much money you got paid. That’s the easy part. The other part is so will the IRS. Once the IRS knows that you’re been getting money electronically, it’s in your best interest that you report it correctly,” Steber said.
Those who earned less than $600 from a side gig in 2022, still have to report earnings or will face penalties/fines.
Steber added, “2022 is going to be a very important tax year. It’s more important than probably ever you pay attention to your tax records as they start to come in.”
When ready to file these documents:
- Life changes
- Other income
File early to get your money, file early to protect your data and file early just in case you need a little extra time and you’re not up against the deadline wall and having to rush to get it all done, and remember this:
“If you leave off a benefit, know this advice: it stays off. The IRS is not in the business of getting you a bigger refund. They’re on the business of getting all their money,” he explained.