Tax season 2021 is finally over and we thank you for your past patronage here at Buenger Accounting. The past two years have included a number of tax law changes due to the Covid epidemic, but most of those are gone or winding down. 2022 looks to be a more normal year, barring any resurgence of the Covid virus. We don’t anticipate too many major tax law changes for the rest of the year, but after this fall’s elections that could change.
Here are the biggest developments to look for in the months ahead:
1- The Internal Revenue Service is in the process of hiring some 10,000 new employees to help catch up on a huge backlog of letters and tax returns. They have suspended sending out any mail notices temporarily, but we expect a large number of notices to go out later this year after the IRS deems itself substantially caught up. Hopefully they will mitigate any interest and penalties that always come with those notices. While the IRS isn’t sending out notices currently, Illinois definitely is, and we’ve been seeing a lot of them this month.
2- To get in front of IRS notices, I am recommending that people set up online taxpayer accounts with the IRS. These are new and available at IRS.gov. Once they have verified your identity, you will have access to all balances due and issues with each year of your tax return. You can also link up with your accountant (me) so that I can see the same information and advise you much faster than in the past.
3- Covid funds have left most states with a surplus of money for the first time in a long time. Both Missouri and Illinois are returning money to their taxpayers this fall if they qualify. Here are the details:
|Income limit per filer||$200,000.00||$150,000.00|
|Tax rebate per filer||$50.00||$500.00|
|Tax rebate per dependent||$100 (up to 3)||none|
|Property tax rebate||5% of bill up to $300||none|
The income tax rebates don’t appear to require residency in either state, but they only refund up to what was owed originally, so for those who owed no state tax, there will be no state tax rebate.
4- In addition, Illinois is suspending sales taxes on groceries for one year, and suspending sales taxes for back to school sales in August. And starting on July 1, there is a new rebate of up to $4000 for any Illinois resident that purchases an electric passenger vehicle. (Applications will be online and must be sent in within 90 days of purchase.) The electric car rebate goes down to $2000 in 2026.
5- One big tax bill in the works is the SECURE 2.0 bill that has already passed in the House of Representatives with a bipartisan majority. This bill, if it becomes law will tweak all of the tax-related retirement rules to encourage more people to save for retirement, including better tax credits for retirement savings, more incentive for automated savings, later Required Minimum Distributions, higher contribution limits and more. We will be watching this as it develops.
6- The biggest issue of the previous tax year was child tax credits and stimulus payments. Both of these are tied to dependents, so we’ve been encouraging people to consider claiming anyone that might qualify as a dependent for 2020 and 2021. If you want more details on the rules, go to the following link on IRS.gov to walk you through the dependency questions.
We will remain open with shorter hours the rest of the year to help with tax extensions and letters. Thank you again and check out our website at https://buengeraccounting.com/ for more updates as tax time gets near again. We also love positive reviews on BBB, Google, or anywhere else.
Wishing you a healthy, prosperous, and safe rest of 2022 and hope to hear from you again. Thank you.
Dan Connors EA, CPA
2235 Pontoon Rd
Granite City, IL 62040