2022 Tax Law Updates

Tax Law Changes for 2022

Educator Expense Deduction

• Increased to $300 ($600 if MFJ and both educators).

Standard Business Mileage Rates

• 58.5 cents per mile (Jan – June)
• 62.5 cents per mile (July – December)
  
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Standard Deductions Adjusted For Inflation

Provisions that Revert to Prior 2021 Rules

Child Tax Credit

• Child tax credit reverts to the $2,000 maximum amount ($1,500 refundable Additional Child Tax Credit)
• Qualifying children must be younger than 17 on December 31st of the tax year
• Earned income requirement returns ($2,500)

Child and Dependent Care Credit

• Reverts to nonrefundable credit status
• Credit worth up to 35% of qualifying expenses for taxes with AGI under $15,000
• Maximum qualifying expenses are $3,000 (one qualifying person), $6,000 (two or more qualifying persons)

Recovery Rebate Credit/Stimulus Payments

• Not available for tax year 2022

Earned Income Credit

• Age limits for taxpayers claiming EIC without children return to 25-65

Inflation Reduction Act Provisions That Apply To Tax Year 2022

Alternative Fuel Vehicle Refueling Property Credit (8911)

• Maximum credit $1,000 (personal residence), $30,000 (business)
• Available for qualified alternative fuel vehicle refueling property installed tax years 2022-2032
• Extended through tax year 2032

Plug-In Electric Drive Vehicle Credit (Form 8936)

• New rules do not take effect until 2023
• Manufacturing caps still exist

New Third-Party Network Transactions (1099-K) Reporting Requirements

As of December 23, 2022 the IRS has delayed new $600 limit to Tax Year 2023.

• Beginning with tax year 2023, individuals who receive $600 or more through a third party network transaction will receive Form 1099-K (this was intended to be 2022 but IRS has delayed to tax year 2023)
• This includes apps such as Venmo, Uber, Lyft, Cash App, Zelle, PayPal, E-bay, etc.
• Taxpayers must report Form 1099-K on their tax return as income if the funds were received for the sale of goods and services
• If amounts on Form 1099-K are incorrect the taxpayer should contact the issuer

For a full list of limits and dollar amounts adjusted for inflation in tax year 2022 reference the 2022 Tax Toolkit.