ARCHIVES
As 2022 tax deadlines quickly approach, SME CPAs has put together a year-end overview regarding your personal, business, and investment tax needs. In addition to that full summary, we’re highlighting a few must-know deadlines and tax strategies to use in the upcoming months. Meet with your tax professional soon for a more in-depth discussion of your tax planning and annual return preparation.
Tax legislation updates
Only recently signed into law, the Secure 2.0 Act of 2022 increases opportunities for retirement savings, influencing financial and tax decisions for many Americans and business owners. As the provisions slowly go into effect, here are just a few changes to expect:
- Expanded automatic enrollment in employee-sponsored 401(k) and 403(b) programs to boost participation
- The ability for employers to match qualifying student loan payments made by employees
- For qualifying individuals, a gradual increase of the age at which required minimum distributions (RMDs) must be taken
The Secure 2.0 Act isn’t the only legislation to know about. Be sure to discuss with your CPA how the Build Back Better Act and Inflation Reduction Act, both of which went into effect January 1, 2023, may impact your tax strategies.
Personal tax strategies
For preparing your personal taxes, keep these regulations and strategies in mind.
Home improvement deductions
The Tax Cuts and Jobs Act (TCJA) eliminated tax deductions on mortgage interest for loans qualifying as “acquisition debt” or “home equity debt” through 2025. However, for 2022, you can still deduct mortgage interest on the first $750,000 of new acquisition debt, offering some flexibility for recent home renovations.
Alternative minimum tax (AMT)
Your AMT liability is an additional calculation made and compared to your regular tax liability to determine which you pay (whichever is higher). The TCJA increased the number of taxpayers exempt from AMT liability. For those not exempt, having your AMT calculated in advance provides time to shift some 2022 income items to 2023 if necessary.
Business tax strategies
Schedule time with your CPA to prepare your personal and your business’s taxes. Remember to discuss these relevant updates and more.
Depreciation-related deductions
Businesses can qualify for one of three depreciation-related tax breaks: the Section 179 deduction, the first-year “bonus” deduction, or regular depreciation. However, your business must have begun using the relevant property before year’s end to qualify.
Deductions on business meals
In the past, businesses could only deduct 50% of qualified entertainment expenses. For 2021-2022, businesses generally can deduct the full cost of restaurant food and beverage purchases, including for employees traveling on business.
Financial and investment tax strategies
Whether your investments are small or large, there are important updates and approaches to consider.
Required minimum distributions
RMDs are standard for qualified retirement plans and traditional IRAs of those over 72 (70.5 for some). The RMD amount is based on IRS life expectancy tables, which, notably, have been revised for 2023 with longer life expectancies. This means smaller RMDs down the road.
Additional tax for moderate- and high-income investors
A 3.8% tax will be added to the lesser of 1) an investor’s “net investment income” (NII) or 2) however much an investor’s modified adjusted gross income (MAGI) exceeds $200,000 (for single filers) or $250,000 (for joint filers).
Important tax planning dates
Don’t forget to plan for these key tax deadlines with your CPA.
- January 31, 2023: All W-2s for your employees must be filed, as well as any 1099-MISC forms for independent contractors.
- March 3, 2023: All tax documents required for your 2022 return due to your SME CPA. If we receive your tax information after Friday, March 3rd, we will file an extension for your individual tax return. Even if your tax return is extended, any tax owed for the 2022 tax year must be paid by Tuesday, April 18, 2023, or you will be subject to penalties
- March 15, 2023: Taxes and forms are due for partnerships, multi-member LLCs, and S-corporations.
- April 18, 2023: File your tax return! Or request an extension if necessary.
- September 15, 2023: Taxes are due for partnerships and S-corporations who requested an extension.
- October 16, 2023: Taxes are due for everyone else who requested an extension.
Businesses that file taxes by fiscal year will have a different date set. Depending on your business type, your return will be due the 15th of the third or fourth month after the fiscal year ends.
For a deeper dive into tax filing this season, check out our year-end 2022 overview.
SME CPAs knows your 2022 filing needs
Now that you have these key strategies to consider, it’s your turn to take steps toward a successful tax season by meeting with your CPA. Contact SME CPAs today for dependable guidance from well-seasoned financial experts. To make tax season even easier on you, we’ve developed guides for submitting documents, sending payments, even signing on the dotted line all from the comfort of your home.