2021 Tax Season
Welcome to 2022, it’s been an interesting couple of years. There are not a ton of tax changes this year but listed below are some of the ones that impact most of us. Please call and schedule your appointment asap, we are encouraging people to send us their paperwork a couple days prior to their appointment time. This system worked very well the last couple of years and allows more time for proactive tax planning rather than watching us type in your information.
Many of you received stimulus payments in 2021. We can only determine any additional
amount owed if you let us know the amount received. Your stimulus payment(s) was
accompanied with Notice 1444-C, which confirms the amount you received. If you have
Notice 1444-C, please include it in your tax paperwork.
Advanced Child Tax Credit
In 2021 some taxpayers were eligible for and received advance child tax credit payments. These are to be claimed against the Child Tax Credit you will receive when we file your 2021 return. You should have a letter from IRS informing you of how much you have received (Letter 6419), if not please contract them for the amount.
Charitable contribution deductions
Individuals who do not itemize their deductions can take a deduction of up to $300 ($600 for joint filers). Such contributions must be made in cash and made to qualified organizations.
The sale or exchange of virtual currencies, the use of such currencies to pay for goods or services, or
holding such currencies as an investment, generally has tax impacts. You will need to provide us with a 1099 showing sales, some of the Apps and alternative wallets do NOT calculate your gain/loss. Most have for an additional fee a calculator; we recommend you do this unless you can personally match up gains/losses.
Looming potential tax legislation
With potential tax changes looming as Congress debates proposals in President Biden’s
“Build Back Better” agenda, there remains uncertainty in how this will impact taxpayers. As
legislation continues to evolve, and if it passes, we’ll keep you informed. Currently there is a provision to disallow “backdoor” Roth contributions, if this is something you contribute to please make sure it is allowable.
Electric vehicles/solar panels
There are credits if you purchase electric vehicles, however some of the credits have been used up and no longer exist. Please do your homework if your purchasing electric vehicle and want the credit. Solar is deductible when your utility provider is connected and your system is operational.
PTE- California only
S-Corps and LLC’s may elect to have state withholding on profits at the entity level. The company will withhold 9.3% of the profit in CA withholdings for the Individual owners. The entity is entitled to deduct the withholdings, which is usually disallowed due to SALT tax restrictions. Beginning 01/01/22 you are required to make the election when you file your tax return. You must also make an initial deposit by June 15th, minimum of $1,000 or 50% of the elective tax paid in the prior year taxable year whichever is greater. NOTE the withholding on the individual level is NOT refundable but will carryover to future years if not used in full.
Calsavers – California only
While enrolling in CalSavers is NOT mandatory, ALL employers in the state of California with at least five W-2 employees MUST offer a qualified retirement savings plan or Calsavers to their employees. If the employer fails to offer a plan, they will face fines. Sign up for 2022 is required by June 30, 2022, if you have or will have 5 or more people on payroll this year.
Peer to Peer Payments
Starting in 2022 all payments via payment card and/or third-party transaction such as Paypal, Venmo, Zelle, etc… over $600 regardless of number of transactions will be reported to IRS via form 1099-k. If this a method of payment your business accepts or provides you need to be aware of this. This is only for business payments not friend/friend or other personal transactions.
Preparation of returns
Tax returns will be e-filed or mailed when we receive your signed Federal, State, and Engagement letters signed along with payment for services. If you receive a letter from tax agencies, please send the letter to us so we can review it.
Last day for individual TAX FILING is April 18, 2022 this year!