The seven brackets remain the same: 10%, 12%, 22%,24%,32%,35%,37%. However, the income thresholds for tax brackets are adjusted to reflect inflation or the cost of living. For example, instead of 10% being applied to the first $9950 of income, it will now be applied to the first $10,275.00 for a taxpayer filing individually.
Also, the standard decuction will increase in 2022 by $400 to $12,950 for single filers or married but filing separately. It will increas to $19,400 for head of households and $800 to $25,900 for married taxpayers filing jointly.
There is also an additional standard deduction of $1,400 that will apply to those wo are either 65 and older or blind. The amount doubles if both apply to a taxpayer in 2022.
On Oct. 22, 2021 NYS Governor Kathy Hochul signed a law making a workplace retiremnt plan mandatory for businesses with 10 or more in-state employees that have been in business for at least 2 years AND don't presently offer a plan.
NYS provides a state-facilitated IRA savings program, The New York State Secure Choice Savings Program, to private sector businesses. Companies do not have to use the NYS plan as long as they implement a plan. NYS has not formally established a deadline as of yet.
As of October, 2019 - all New York businesses are required to provide preventing sexual harassment training to their employees this year and every year thereafter. NHCG, Inc. has developed an online workshop that meets the New York State requirements for this training. Click on the link below to register yourself and your employees.
Don’t put yourself in jeopardy for being out of compliance.
Fines and penalties can be significant.
Tens of thousands have already taken this training.
Click here to register
The IRS website became available for filing 2021 returns as of Monday, January 24, 2022.
The IRS advises taxpayers watch for the following two letters:
Letter 6419 outlines the total amount of advance Child Tax Credit payments you received in 2021 and the number of qualifying children used to calculate the payments.
Schedule 8812 should be filed to claim any remaining credit or determine if you must pay back any of the payments you received in 2021.
Letter 6475 relates to the third stimulus payment that was available and how much you received. I am assuming that, again this year, if you did not receive this stimulus payment and were entitled to it; an adjustment will be made to increase your refund or reduce any taxes owed
Please watch for these two letters as they are important parts of your 2021 filing
Various sources are now reporting that the Internal Revenue Service is holding up millions of tax refunds for manual processing. Furthermore, they are faced with manually processing many of the quarterly payments that were required by April 15 as their automated systems were unable to process them.
The recent tax laws passed by Congress created complexities beyond what their systems were able to accomodate. Industry groups such as the National Conference of CPA Practitioners had foreseen these difficulties and had urged the IRS to delay the deadline for the payments until May 15th to align with the modified extended filing date but were rebuffed.
Anyone wanting to check the status of their return can access the IRS website and use their "Where is my Refund" tool to check the status of their submitted return.
The Internal Revenue Service said on Wednesday, it plans to take steps to automatically refund money starting in May and continuing through the summer to taxpayers who filed tax returns reporting unemployment compensation prior to recent changes under the ‘American Rescue Plan’.
The COVID relief package, which President Biden signed into law this month, enables taxpayers who earned under $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if they’re married filing jointly, or $10,200 for all other eligible taxpayers. The relief package excludes only 2020 unemployment benefits. However, that change happened after some people already filed their taxes early this season, so the IRS said it will take steps in the spring and summer to figure out the appropriate change to their return, and that could result in a refund.
The first refunds are anticipated to go out in May and will continue into the summer.
- The first $10,200 in unemployment benefits are free of tax in 2020 for taxpayers making less than $150,000 per year.
- Individuals will be provided a $1,400 recovery rebate credit ($2,800 for married taxpayers filing jointly), plus a $1,400 credit for each dependent, and like last year’s economic impact payments, the IRS will send out advance payments of the credit. For single taxpayers, the credit and payment begin to phase out at an adjusted gross income (AGI) of $75,000, and will completely phase out for single taxpayers with an AGI over $80,000. For married taxpayers filing jointly, the phaseout begins and ends at an AGI of $150,000 and $160,000, respectively, and for heads of household, the phaseout begins and ends at an AGI of $112,500 and $120,000, respectively.
- The child tax credit is increased to $3,000 per child ($3,600 for children under age six), with a phase out similar to that in item (2), above, for the corresponding filers. The IRS is directed to estimate taxpayers’ child tax credit amounts and pay monthly in advance one-twelfth of the estimated amount, with payments running from July through December of 2021. The IRS will also set up an online portal to allow taxpayers to opt out of advance payments or otherwise modify the amounts to be paid.
- The child and dependent care tax credit is refundable in 2021. It is worth 50% of eligible expenses, up to an income limit, and results in a refundable amount of $4,000 for one qualifying individual and up to $8,000 for two or more. A reduction of the credit begins at household income levels over $125,000.
- The credits enacted by the Families First Coronavirus Response Act are now statutorily codified. The most important changes associated with these credits are:
- the credit for paid family leave is increased to $12,000.
- the number of days that a self-employed individual can take into account in calculating the qualified family leave equivalent amount for self-employed individuals is now sixty, up from fifty.
- paid leave credits are allowed for leave taken due to a COVID-19 vaccination.
- the limitation on the overall number of days taken into account for paid sick leave will reset after March 31, 2021.
- The employee retention credit is extended through the end of 2021. The credit is allowed against the Medicare tax.
- Any amount ordinarily includable in income due to a discharge of any student loan after December 31, 2020 and before January 1, 2026 will not be so included.