The 2022 filing season begins on January 23, 2023 and the changes may cause some shock for individuals expecting large refunds.

As a reminder, the 1040EZ and 1040A were removed. There is no “easy” form when filing tax returns. Individuals either file the 1040 or the 1040SR. Other forms or schedules may need to be attached to the 1040, like the Schedule C – Profit or Loss from Business. You are essentially considered self-employed if you receive a 1099-Misc or 1099-NEC for non-employee contributions and should include the Schedule C on your returns.

Many of the extended or given credits received over the last couple of years due to the pandemic have expired. We will be reverting to the pre-pandemic situation. IRS changes, e-file changes, and new or updated forms and schedules have been released. Here are a few of the significant changes.

Due to the expiration of American Rescue Plan Act of 2021 (ARPA) (P.L. 117-2)

For the 2022 1040, Lines 12b and 12c were removed, as the election to claim a charitable contribution for taxpayers who do not itemize deductions has expired. The tax law changes of 2017. The Tax Cuts and Jobs Act, drastically affected who could use their mortgage interest, and real estate taxes, among other items on the Schedule A (Itemized Deductions) or who must use the standard deduction that the government gives to everyone. For example, unreimbursed employee business expenses for most folks were eliminated. If you work for an employer and receive a W2 at the end of the year, you can no longer write off parking, mileage, or office use of your home. The TCJA increased the standard deduction, so the overall threshold to itemize increased. However, donating to church or Goodwill was still allowed on a separate line. That will be changing this year too. Charitable Contributions are included on the Schedule A so if you do not itemize, you cannot use those.

Line 27c was removed, as the election to use prior-year earned income to figure EIC has expired. The childless EIC age range (25-65) has been reinstated. Additionally, 2019 earned income can no longer be used in place of current-year earned income to calculate EIC. The earned income credit is available for taxpayers who earn under a certain amount. The number of dependents claimed on the return increases the EIC. Last year, the IRS allowed the best income amount to receive the highest credit. So if you made more in 2020 than in 2019, the IRS allowed you to use 2019’s income to calculate the EIC. That will not be the case for 2022.

Line 30, previously used for the Recovery Rebate Credit, is now reserved. If you did not receive the full amounts for stimulus 1, 2, or 3 when they were distributed, then the RRC would reflect that on your 2020 and 2021 tax returns.

https://www.opm.gov/policy-data-oversight/pay-leave/ARPA/

https://www.law.cornell.edu/wex/tax_cuts_and_jobs_act_of_2017_%28tcja%29

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