Tax Season Letter 2022
January 10, 2022
Dear Clients & Friends:
Here it is a new year and a new tax season. We hope you had an enjoyable holiday season and got to spend time with friends and family. There were many tax changes in 2021 and we attended many seminars to keep abreast of these changes and how they will affect our clients.
Enclosed, please find our quarterly newsletter. The year-end edition contains quite a bit of information that you will find interesting and may be beneficial to you as you gather your 2021 tax documents and plan for 2022.
As mentioned in our Summer Tax Update, new this year is the increase in Child Tax Credit. You can receive a credit of $3,000 for children ages 6 to 17 and $3,600 for children ages 5 and under; as long as your adjusted gross income is under the threshold amounts. If you received advanced payments for this credit, we will need to include that information on your return.
The limit for charitable contributions increased in 2021. It is now 100% of your income. The limit for noncash contributions is 50% of your income. A $300 charitable deduction is available for single filers and $600 for married filers for non-itemizers in 2021. Also, the tuition and fees deduction were replaced with an expanded income limit for the Lifetime Learning Credit. The credit is worth up to $2,000 per tax return if you qualify.
CRYPTOCURRENCY – This is a HOT topic at the IRS and the tax seminars we have attended. Crypto is going main stream with many people investing in it and some are using it to buy things in the market place. Recording these transactions on your tax return will require specialized record keeping. See attached letter for more information.
Always take the time to review your Social Security Earnings Report. The Social Security office can and does make mistakes and waiting until retirement could be too late to make corrections. You can check your Social Security record by setting up an account with ssa.gov You will need this account to sign up for Social Security benefits and Medicare.
Identify Theft is on the rise! Follow these important steps listed in the newsletter to prevent theft as much as possible.
Also, the standard mileage rate increased from 56 cents to 58.5 cents for 2022 for every business mile driven, 16 cents per mile for medical and moving miles and 14 cents per mile for miles driven in service of a charitable organization.
For our clients who are employers, the Delaware Unemployment wage base was reduced to $14,500. The Delaware Department of Labor predicts that lowering the taxable wage base to $14,500 will save employers more than $11 million in 2022.
There have been a few changes in our office staff. Next time you come in, please help us welcome our new Office Manager, Jenn, and a new member of our accounting team, Penny. We are excited for a new tax season with our new team members.
Please call our office for an appointment as soon as you receive all of your tax information. We try to use the first-in, first-out method when preparing returns, so the sooner you bring in all your information, the sooner we will be able to prepare your return and get it back to you. We will be mailing out our organizers in the coming weeks. If you are interested in getting one, please call our office to get added to the list. We are looking forward to meeting with you in the coming weeks and assisting you with your financial and tax preparation needs.
Thank you for your continued patronage. As always, we welcome any feedback you may have on the services we offer and we also welcome any referrals you may have.
Sincerely,
Starkey & Company, PA