904-356-0349 info@nedjacksontax.com

Midyear Mileage Changes

Gas prices aren’t the only thing rising this year. Do you claim mileage on your Schedule C? You’ll want to read this. The IRS has increased the mileage rate for the final 6 months of 2022. You will be able to use the “optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.” Unprecedented times to be sure; the last time mileage rates changed mid-year was in 2011. What does that mean for you?

Considering recent fuel cost increases, the IRS has made a special adjustment for the remainder of 2022. Effective July 1, 2022, the standard mileage rate for business travel will be 62.5 cents, up 4 cents from the start of year rate. Rates related to moving and medical expenses will be 22 cents, also up 4 cents from the effective rates at the start of the year. There is a legal guidance PDF, provided by the IRS available on their website, that will be linked below. In a recent interview withthe IRS Commissioner Chuck Rettig, he states “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking the special step to help taxpayers, businesses and others who use this rate.” Well, thank you Chuck, we appreciate that!

We hope you find this information helpful as you begin to prepare for the upcoming tax season. Listed below, you will find some links with commonly asked questions about the changes to mileage rates. And as always, the information for our main office downtown will be listed as well. Don’t forget to check back for more!

LINKS
https://www.irs.gov/newsroom/irs-increases-mileage-rate-for-remainder-of-2022

https://www.irs.gov/pub/irs-drop/a-22-13.pdf

Ned Jackson Downtown Office
Address
255 N Liberty Street
Jacksonville, FL 32202

Phone
(904) 356-0349

Email
info@nedjacksontax.com

The New W-4

2020 was a year that yielded many changes; among those, were your W-4 forms. You may or may not have known about this, as it wasn’t required you fill out a new form. However, there are some changes to be aware of that could affect your upcoming tax return.

Out with the Old, In with the New

We’ve all heard it before, the age old saying, “If it ain’t broke, don’t fix it.” So why did they? As the W-4 was created to help you break even, they’ve attempted to make things simpler and more accurate. And while the new form may be simpler in number of steps, it can feel a bit more complicated in comparison to the old form, we knew and loved. Let’s go through the form step by step to ensure you’re filling this out accurately.

Step 1

Much like the old form W-4, step 1 is basic demographic information. One of the major differences is the filing status. If you notice, the filing status options are as follows:

• Single or Married filing Separately
• Married filing jointly (or qualifying widow(er))
• Head of Household

Of course, you’ll want to select accordingly. It’s important to mention here, if you are married filing jointly and don’t include all other income, it will put you in a lower tax bracket, resulting in a lesser amount being withheld. Next, you will observe they emphasize to complete steps 2-4 ONLY if they apply to you. Don’t worry; Ned already knows your next question; Does it apply to me? Visit ‘Step 2-4’ to find out.

Step 2-4

 

You’ll want to complete step 2 if you hold more than one job or are married filing jointly and your spouse also works. The correct amount of withholding will be dependent upon income from all your jobs (and your spouses’ jobs) combined. If you have only two jobs, you’ll be able to select the box under 2c, but it may also be a good idea to complete the ‘Multiple Jobs Worksheet’ on page 3, to get an accurate idea of how you will come out when filing your taxes.

Now, for those who have children you will use step 3 to claim your dependents; those under the age of 17, and all other dependents. You’ll add the amounts listed in a and b, and you’ll list the total amount in c.

We will look at step 4 in three parts (a, b and c).

4a) If you’re a taxpayer that normally carries interest, dividends and retirement that won’t have withholding, you may want to consider reporting it early.

4b) If you’re a taxpayer who knows you’re able to itemize and won’t be taking the standard deduction, you can report your average deduction amount here, so less withholding will be taken out.

4c) If you’d like any additional withholding taken each pay period, as ‘insurance’, you’ll place that amount here.

Finishing up, you’ll need to complete step 5, which is just your signature and the date. Once this form is completed and submitted to your employer, you’ll want to check and make sure the correct amount of withholding is being taken out. You can do this, by checking your paper or electronic paycheck stubs/statements.

We hope you find this information helpful as you begin to prepare for the upcoming tax season. Listed below, you will find some links with commonly asked questions about the new form W-4. And as always, the information for our main office downtown will be listed as well. Don’t forget to check back for more!

LINKS

http://www.irs.gov/newsroom/faqs-on-the-2020-form-w-4

Ned Jackson Downtown Office
Address
255 N Liberty Street
Jacksonville, FL 32202

Phone
(904) 356-0349

Email
info@nedjacksontax.com

Tax Liabilities and Marketplace Insurance

Since 2010, The Health Insurance Marketplace (or Exchange) has been giving private insurance companies a run for their money with their affordable healthcare plans. It was introduced to help low-income families have affordable access to healthcare, as a part of the Affordable Care Act, more commonly known as ‘Obamacare.’ Admirable as it may be, there are some things you may not know about the Marketplace as it relates to your income taxes. Don’t worry, that’s what we are here for! Keep reading for all of Ned’s need-to-knows as they relate to the Marketplace.

First, if you’re not enrolled in Marketplace but need to, you’ll want to visit www.healthcare.gov. On the site, you’ll be able to check when open enrollment is, enroll for coverage, and create an account so you can check the status of your enrollment and make premium payments. Additionally, you will be able to check if your life event qualifies you and your family for a plan change, or a special enrollment period. If you’re not sure if you have marketplace insurance or not, you can access your states marketplace number via google.

Next, you’ll want to be careful when you enroll for Marketplace that you’re reporting an accurate estimate of your income for the year as well as any projected changes to your family size. If this information is reported incorrectly, when filing your taxes, you will be required to pay back some or all the premiums that were subsidized over the period of the year, having the potential to drastically change your amount owed or refund amount. You can avoid this, by keeping up with income projections throughout the year, and reporting expected increases in income and household size to the marketplace, if applicable, as soon and as often as the information is made available to you.

Lastly, if you have purchased health care insurance through the Marketplace, you should receive a Form 1095-A Health Insurance Marketplace Statement at the beginning of the tax filing season. If for some reason you do not receive this form by mail, you will be able to access it through your account at www.healthcare.gov. This form reports the total monthly health insurance premiums paid to the insurance company you selected through the Marketplace for you and your family. In turn, this helps your tax firm correctly report the subsidy for you and your family members.

We hope you find this information helpful as you begin to prepare for the upcoming tax season. Listed below, you will find some links with commonly asked questions about the marketplace. And as always, the information for our main office downtown will be listed as well. Don’t forget to check back for more!

LINKS
https://www.healthcare.gov
https://www.irs.gov/affordable-care-act/individuals-and-families/the-health-insurance-marketplace

Ned Jackson Downtown Office
Address
255 N Liberty Street
Jacksonville, FL 32202

Phone
(904) 356-0349

Email
info@nedjacksontax.com

Tax Breaks; Expiring and Phasing Out

First, let’s talk about tax extenders. You may know them as ‘tax provisions’ or ‘tax breaks.’ What are they, and how do they effect you? The most common of the tax extenders is the Child Tax Credit. Don’t worry, it isn’t going anywhere. However, you do need to be aware of a few things. Here’s what we know! With the American Rescue Plan expansion having ended, the child tax credit will be reverting to its original design. According to the U.S Department of The Treasury, the credit will be going back to $2000 per child, as opposed to the $3600 or $3000 (depending on the age of your child) credit given in the tax year 2021. Additionally, after tax year 2023 17-year-olds will be excluded as they were in previous years, making only children 16 and younger eligible.

While the child tax credit may be here to stay (for now), there are some tax breaks that will be expiring at year-end. Business owners, these are for you! When you file in 2023, it will be the last year you can write off 100% of restaurant meals, barring the cost is justified. Don’t panic! As far as we know and have been told by the IRS, you will still be eligible to deduct 50% in coming tax years. Next up; depreciation. Now this isn’t so much an expiration, as it is a phase out. This will be the last year you will be able to write-off 100% bonus depreciation for the cost of new and used qualifying business assets of 20 years or less, as it will drop to 80% in 2023. Finally, the tax credit for installing solar panels, solar-powered water heaters, and so forth in your home will be falling from 26% to 23% next year. Ultimately, congress could act to extend these breaks, and if they do, we will update you. As for now, this is the latest information we have. We hope you find this information helpful as you begin to prepare for the upcoming tax season. If you have any questions, the information for our downtown office will be listed below and don’t forget to check back for more!

Ned Jackson Downtown Office

Address
255 N Liberty Street
Jacksonville, FL 32202

Phone
(904) 356-0349

Email
info@nedjacksontax.com

https://home.treasury.gov/policy-issues/coronavirus/assistance-for-american-families-and-workers/child-tax-credit
https://www.irs.gov/newsroom/for-national-small-business-week-plan-now-to-take-advantage-of-tax-benefits-for-2022-enhanced-deduction-for-business-meals-home-office-deduction-and-more

Call Now ButtonCall for an appointment
X