Individual taxpayer: here are a few changes to the Federal tax Law that may affect how you file your 2022 tax return and the amount of your refund.
There are changes to the law that could affect how you file your taxes and the amount of your refund. Let’s review what’s new.
Qualifying widow(er) becomes Qualifying surviving spouse
In 2023, you must select the Qualifying surviving spouse filing status if you usually file as Qualifying widow(er). The rules for the filing status have not changed, it is just called differently.
A few Covid-19 related credits have not been extended in 2022.
A few Covid-19 related credits have not been extended in 2022. They are as follows:
- Credit for sick and family: if you’re self-employed.
- Earned Income Credit (EIC): if you don’t have a qualifying child. Taxpayers without qualifying children were eligible in 2021.
- Credit for the child and dependent care: if you have a young child will not be refunded to you.
- Child Tax Credit: if you have a child under age 17 at the end of 2022 and qualify for this credit, you’ll get at best $2,000 per child versus $3,600 per child in 2021.
- Premium Tax Credit: if you enroll in health insurance coverage through the marketplace, this year you won’t get this.
During the fiscal year October 1, 2020 September 30, 2021, the Internal Revenue Service (IRS) processed more than 261 million tax returns and other forms, up from 240 million the previous fiscal year. Individual and business income tax returns and employment tax returns account for 227 million (87%) of the returns and forms filed in the fiscal year ended September 30, 2021.
With 168 million tax returns filed in the fiscal year ended September 30, 2021, up from 157 million the previous fiscal year, individual income tax returns represent about two returns out of three filed during that period. In comparison, 12 million business income tax returns were filed during the same period. This represents only 5% of the number of returns and forms filed.
During the fiscal year ended September 30, 2021, the IRS collected nearly $4.11 trillion in Federal taxes paid by individuals and businesses. Individual income tax and employment taxes account for $3.6 trillion (86%) of the $4.11 trillion collected during that fiscal year:
• Individual taxpayers paid $2.3 trillion (56%) of the $4.11 trillion collected;
• Businesses paid $419 billion in business income tax, and
• Individual taxpayers and businesses paid $1.3 trillion of employment taxes. Employment taxes include payroll tax and self-employment tax.
The IRS issued more than $1.1 trillion in refunds out of the $4.11 trillion collected in the fiscal year ended September 30, 2021.
Most of the individual income tax returns are filed between January and April.