As we approach the end of 2022, America is still recovering from the COVID-19 pandemic, and taxpayers must consider the multiple changes in tax rules that were intended to help the country cope with economic impacts of the disease.
These rules, and other changes in the law, may impact your end-of-year planning.
Major tax changes from recent years remain in place, including lower income tax rates, larger standard deductions, limited itemized deductions, elimination of personal exemptions, a lessened alternative minimum tax (AMT) for individuals, a major corporate tax rate reduction, limits on interest deductions, and generous expensing and depreciation rules for businesses.
One major tax bill, the Infrastructure and Investment Jobs Act (IIJA), was passed late in 2021. Another major tax bill, the Inflation Reduction Act of 2022, was passed this year.
Key tax provisions of the IIJA include the retroactive termination of the employee retention credit back to October 1, 2021, and information reporting for digital assets like cryptocurrency. In addition, the IIJA contains tax provisions covering disaster relief, capital contributions to public utilities, excise taxes, and pension interest rates.
Although the changes made by the Inflation Reduction Act of 2022 generally aren’t effective until 2023 (and beyond), the Act did make significant changes to some energy credits and other items that should be consider in your tax planning.
We have provided separate briefing memos that discuss the year-end issues faced by individuals, and by businesses and business owners. Both can cover only some key points of what in many cases are complex issues that require careful, individualized analysis. For that reason, we urge you to contact us for advice on strategies that fit your specific situation.
For tax planning ideas for individuals, click here.
For tax planning ideas for businesses, click here.