CHARLOTTE, N.C. — The first month of 2022 is well underway. Many people have a lot of New Year's resolutions, and one of the most common is to get their finances in check.
And while Tax Day is still a few months away, there are some things folks should start thinking about now.
Last year was a lot like 2020 in terms of government help. From stimulus checks and child tax credits to boosted unemployment, the government helped millions of people get through and now those payments could affect your income tax returns in 2022.
- CEO of Alloy Wealth Management, Mark Henry
- The IRS
If you received the Advanced Child Tax Credit, could that affect your tax return?
"If they made more money in 2021 when they file their taxes, they may get a surprise," Henry said. "They may actually owe money back to the IRS because they received that tax credit, they got a raise or a bonus."
According to the IRS in 2021, the American Rescue Plan increased the child tax credit for families who qualified. However, Henry tells us if you received more money in 2021 than the IRS was estimating you would make, then you might have to pay some of it back.
If you worked from home, can you claim that as a home office?
According to the IRS, unless you are self-employed, you cannot write off home-office expenses as deductions.
Will the new tax brackets released by the IRS affect your taxes?
According to the IRS, income tax brackets and the standard deduction have been adjusted to reflect inflation.
"This is a good thing they went up a little bit they went up anywhere from 1-3%, so it depends on your deductions, how much you take out of your checks," Henry said. "Let's say you didn't get a raise and you get the same income as you made last year, you may not have to take as much out during the year."
According to the IRS, this went into effect for 2022, so you won't see this on your tax returns this year; you'll see it affect the taxes you file in 2023.
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