2022 Income Tax Season: What to Know Before You File in California


CALIFORNIA – The 2022 tax season is upon us – and as W-2s and other tax forms hit US mailboxes, many Californians will be wondering when they can file and what changes are in store for their returns this year .

The first day to file 2021 tax returns is January 24, according to the Internal Revenue Service. This is two weeks earlier than last year.

As the Internal Revenue Service grapples with staffing shortages, backlogs and aging technology, watchdog groups are encouraging taxpayers to file their 2021 returns as soon as possible before the Monday, April 18 tax deadline. They must also file electronically.

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RELATED: IRS “in crisis”: why taxpayers should file early, avoid paper

This is the second year that Americans will be filing tax returns that will likely be significantly different from previous years due to the ongoing coronavirus pandemic. One of the biggest changes that could affect filing this tax season is the expansion of child tax credit payments received by a large majority of Americans.

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Before you file your return, here’s everything you need to keep in mind about the 2022 income tax season:

How will child tax credit advance payments affect my return?

In the last six months of 2021, millions of families received monthly payments based on the number of children in their household as well as their age. According to a report by Forbes, these very first advance payments of child tax credits could affect your tax return in different ways.

First, filers will be required to report the amount they received in payments. Depending on the amount of child tax credit payments received in 2021, filers may receive a larger or smaller tax refund than expected. They may even owe additional taxes.

To determine if you owe additional taxes, the IRS will send letter 6419, which will show the total amount of child tax credit payments you received. You should compare this amount to the total child tax credit to which you are entitled.

If the total child tax credit you are entitled to exceeds the amount you received, you can claim the remaining amount on your 2021 tax return. If you received more than you are entitled to, you will have to repay some or all of the overpayments when filing income tax.

The IRS has more answers to questions about child tax credit advance payments on its website.

What about the COVID-19 stimulus payment I received this year?

If you received a stimulus payment between March and December 2021, you will receive letter 6475 from the IRS in early 2022, which indicates the amount of your third stimulus payment. Do not throw away this letter. You will need it to claim payment of your taxes.

The 6475 letter will also help determine if you qualify for the salvage rebate tax credit.

The Recovery Rebate Tax Credit Worksheet will be used to claim any additional payments you may be owed on your 2021 tax return. This is especially important if you did not receive a stimulus payment or you only received partial payment.

If you qualify for the salvage rebate tax credit but do not generally file a tax return, you will need to file your tax return to receive the funds owed.

Learn more about this year’s Economic Impact Payments and Recovery Tax Credit.

What if I received unemployment benefits this year?

Unemployment fell sharply last year. Still, 25 million Americans filed for unemployment benefits in 2021, CNBC reported.

The American Rescue Plan Act passed in March eliminated federal tax on up to $10,200 of unemployment benefits, per person, collected in 2020; however, Congress has not passed legislation providing similar tax relief on 2021 benefits.

This means that if you received unemployment benefits in 2021 and did not withhold any federal tax from the benefit payments – or withheld too little – you may owe money this tax season.

If I donated to charity, do I need to itemize the deductions?

Not necessarily. If you plan to claim the standard deduction on your 2021 tax returns, you can deduct up to $600 in charitable contributions.

In 2020, a charitable donation deduction of $300 was allowed under the CARES — Coronavirus Aid, Relief and Economic Security — Act. This year, however, the charitable deduction is more for those who file a joint return.

For 2020, the charitable limit was per “tax unit” — meaning those who are married and filing jointly could only get a $300 deduction. For the 2021 tax year, those who are married and filing jointly can each take a $300 deduction for a total of $600.

Under this change, individual taxpayers can claim an “over the line” deduction of up to $600 in cash donations to qualifying charities in 2021. This means that the deduction both reduces the gross income and taxable income, which translates into tax savings for those who donate. to the qualifying tax-exempt organization.

Have California tax laws changed this year?

California has seen some changes in its tax laws. Marijuana grow taxes have increased this year to account for inflation. Flowers are also now taxed at $10.08 per dry ounce and leaves are taxed at $3 per dry ounce. Fresh marijuana plants are now taxed at $1.41 per ounce.

Before the New Year, taxes on flowers were $9.65 per ounce dry weight, leaves $2.87 per ounce dry weight, and marijuana plants $1.35 per ounce.

Am I entitled to the earned income tax credit?

The Earned Income Tax Credit exists to help middle-to-low-income individuals and families reduce the amount of taxes they pay and may help them get more refunds, according to the IRS.

The IRS has an online tool to see if you qualify for the credit.

What is the standard deduction for 2022?

The standard deduction is a dollar amount that reduces the amount of income you are taxed on and varies depending on your filing status.

The standard deduction for each filing status for the 2022 tax year has changed slightly from 2021, according to the IRS:

  • Filing separated or married separately: $12,950, up $400 from 2021.
  • Married jointly filing or eligible widow: $25,900, up $800 from 2021.
  • Head of household: $19,400, up $600 from 2021.

Other federal changes for the 2022 tax year are listed here.

What are the tax brackets and thresholds for single filers this year?

  • 10 percent – $0 to $9,950
  • 12 percent – $9,951 to $40,525
  • 22 percent – $40,526 to $86,375
  • 24 percent – $86,376 to $164,925
  • 32 percent – $209,426 to $523,600
  • 35 percent – $416,701 to $418,400
  • 37% — $523,601 or more

When is Tax Day this year?

For most taxpayers, the deadline to submit 2021 tax returns or to file an extension to pay taxes owed is Monday, April 18. Taxpayers in Maine or Massachusetts have until April 19 to file their returns. Taxpayers requesting an extension will have until October 17 to file their case.

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