Video: Most Important Changes for Tax Year 2022
With the tax deadline quickly approaching, Lisa Greene-Lewis, CPA and TurboTax tax expert, outlines the biggest tax changes you need to know before filing.
Video Transcript:
[00:00:04.97] TRACY BYRNES: So with tax season right around the corner, there's a bunch of changes that you need to know for your 2022 tax return this year. Lisa Greene-Lewis, TurboTax expert and CPA, is here with us right now. All right, so there are things that people need to know. First and foremost, there were no stimulus checks last year, were there?
[00:00:21.50] LISA GREENE-LEWIS: Right. Those have gone away. If you didn't get a stimulus for the third stimulus under American Rescue Plan, tax year 2021 was the last time that you could claim the recovery rebate credit. There is no more recovery rebate credit.
[00:00:37.10] Also, what people need to know, many of the provisions that were expanded under American Rescue Plan, they're either reverting back to what they were before the American Rescue Plan. And then some of those provisions have gone away.
[00:00:51.00] TRACY BYRNES: So things like you're talking about the child tax credit, the earned income tax credit, and the child independent care credit. Those were expanded and now they're going back.
[00:01:00.59] LISA GREENE-LEWIS: Yes. So the child tax credit that was expanded to up to $3,600. That's going back to up to $2,000. The child and dependent care credit that was expanded up to $8,000 if you had two or more kids. That's going back to $2,100 with two or more kids.
[00:01:19.22] And then the earned income tax credit, that was expanded to a wider audience of tax filers if you didn't have kids. So for tax year 2021, only if you didn't have kids, there was no age requirement, but that's going back to you have to be 25 or under 65 to claim the earned income tax credit.
[00:01:42.14] TRACY BYRNES: Yeah. And those are noticeable credits that people are going to see difference on their tax returns barring consistency between years. Let's talk about charitable deductions because in the past, whether you itemize or not, you were able to take a little bit of a deduction. And you're saying you can't do that anymore.
[00:01:57.51] LISA GREENE-LEWIS: Yes. So for the 90% of taxpayers that claim the Standard Deduction, they were able to claim up to $300 in cash donations and up to $600 if they were married filing jointly. That is going away. That's going back to the way it was before. In order to claim those cash contributions, you have to be able to itemize.
[00:02:20.58] TRACY BYRNES: Right, which is the way it's always been this was just a small little gift. That means gather your receipt, then get out that shoe box full of donations. And finally, let's talk about this Inflation Reduction Act. What do we get from that this year?
[00:02:34.82] LISA GREENE-LEWIS: Yes. So for the Inflation Reduction Act, there were many provisions that expanded energy efficient credits. And there are also some new provisions in that. The majority of them are for tax year 2023, the taxes you file in 2024, but there are a few that can help your taxes in this tax year.
[00:02:57.69] So the residential energy efficient credit, that is for solar, that was at 26% of your costs. That is going back up to 30% for tax year 2022. And then you are always able to get the $7,500 credit for electric vehicles.
[00:03:19.85] And under the Inflation Reduction Act, you could still get that, but there is one provision in the new clean vehicle credit that you have to watch out for. So if you purchased an electric vehicle after August 16, it has to be fully assembled in the United States in order to get the credit.
[00:03:42.19] TRACY BYRNES: Wow. And I'm sure TurboTax will walk you through all of this.
[00:03:46.37] LISA GREENE-LEWIS: Yes. So you can come to TurboTax, and you can fully hand your taxes over to a TurboTax Live full-service tax expert. And they can do your taxes in one meeting while you sit there and get your taxes done.
[00:04:02.66] TRACY BYRNES: Yeah. And so make sure you get all your paperwork together, including some document or certificate that says the vehicle was put together in the United States. Lisa Greene-Lewis, TurboTax expert and CPA. Thank you so much for all of that.
[00:04:16.67] LISA GREENE-LEWIS: Thank you for having me.
With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted.
And if you want to file your own taxes, you can still feel confident you'll do them right with TurboTax as we guide you step by step. No matter which way you file, we guarantee 100% accuracy and your maximum refund.
