Tax Season Updates for 2021-2022
The world is gradually coming back to its normalcy. You are probably going back to your physical work places, classes, and institutions. So naturally, the leniency which we had during the pandemic is shortening up. For instance, the tax season of 2021 gave us an extra month to file taxes. However, the tax season in 2022 is trying to shake off the pandemic consideration as we’re progressing towards a healthier and stable circumstance.
Tax Season for 2021-2022 comes with some major updates in some of the tax write offs. In this article, we will go through the updates on the tax-return deadline along with the refundable taxes.
1. Deadline for Tax Season 2021-22
The deadline for tax season 2021-22 is April 18th. You must organize all your refundable expenses and file it within this stipulated time. If you’re struggling to organize the expenses and need more time then apply for an extension. The tax filing extension deadline is October 17th 2022. Keep in mind that an extension of time to file your return does not grant you any extension of time to pay your taxes.
2. Standard Deduction Increased
Minimizing your tax expenses is one of the best feelings, isn’t it? 2021-2022 allows you to feel this ecstatic feeling as the standard for tax-write offs has been increased. This means more savings on your tax expenses! All you need to do is itemize your tax deduction to avoid the hassle.
There’s been a specific deduction in the dollar amount that reduces your taxable income. The standard deduction for single tax filers has increased to $12,550 and for married couple filing jointly the amount is $25,100.
3. Tax credits
The Coronavirus Aid, Relief, and Economic Security Act a deduction upto 100% of your gross income. Besides if you’re self-employed then you can get hold of a bunch of tax deductions by claiming home office deductions. The Earned Income Tax Credit for a single filer with no children is $ 21.430 and for a married couple with three or more children is $ 57.414. Apart from there are Child Tax Credit, Education and several other tax credits that can help you reduce your tax expenses.
For more details on this, read up this article: (link)
4. Stimulus Checks
Stimulus Checks are an effective way to boost consumption and drive revenue at retailers. According to the American Rescue Plan Act 2021, the IRS sent around $ 1400 for individuals and an additional $ 1400 for dependents.
The update is, stimulus checks are not considered as a part of your taxable income! So still your stimulus check will not have an effect on your tax expenses.
5. PPP Loans Deductible from Taxable Income
Coronavirus adversely impacted each and every sector. The business sector suffered tremendously which is why many business owners undertook the Paycheck Protection Program (PPP).
The good news is that in December 2020, the IRS announced that any eligible expenses paid with PPP loans are deductible from taxable income.
6. File Early, Remotely, and Electronically
To minimize the hassle of tax filing, the IRS suggested filing tax electronically. You can file your tax returns for free by using tax preparation and filing software. So less time is consumed.
These are some of the major highlights of tax filing for 2021-2022. Hope this helps you to accelerate and smoothen your tax refund. For any further information, contact Ahad&Co.