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
