As the 2022 tax season approaches, there are several important updates of which service providers should be aware. A few important changes are outlined here.
- Advance Child Tax Credit Payments. Families who received advance child tax credit payments will need to compare the monthly payments they received with the amount they are eligible to claim on their 2021 tax return to determine if they may be able to claim additional credit or if they will need to repay some credit. Eligible families who did not receive monthly advance payments in 2021 can get a lump-sum payment by claiming the child tax credit when they file their 2021 federal income tax return this year.
- Changes to the Charitable Contribution Deduction. Taxpayers who do not itemize deductions can qualify for a deduction of up to $600 for those who are married filing joint returns and $300 for all other filers who made cash contributions to qualifying organizations in 2021.
Retirement Plan Contribution Limits. The annual contribution limit for TSP, 401 (k), 403 (b) and most 457 plans for 2021 was $19,500, with a maximum catch-up contribution limit of $6,500. For 2022, the contribution limit increased to $20,500 with no change to the catch up contribution. For both Roth and Traditional IRAs, the contribution limit remains unchanged at $6,000, or $7,000 for those ages 50 or older.
Join us for the upcoming February 15th webinar, â2022 Tax Updates: What Service Providers Need to Know,â to cover these and additional updates in depth. Free CEU credits are available for AFCs and CPFCs.
The IRS's Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals, including those who generally make $58,000 or less, those with disabilities, and limited English-speaking tax payers. Providers can be found via the IRS website.
For those working with service members who are unsure about how these and other updates may affect their tax situation, tax professionals are available to help through Military OneSource. MilTax consultants are specially trained to help with unique tax situations specific to Service members and their families. Additionally, free MilTax preparation and e-filing software is available through mid-October.
For additional content related to working with clients on personal financial issues, visit the MFLN Personal Finance Team. Free CEUs are available for AFCs and CPFCs through our webinars.
Written By:
Selena Garrison
Program Coordinator
Comments (0)