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2022: How Your Tax Return Will Be Different This Year

Jo Willetts, EA

Director, Tax Resources

Published on: November 15, 2022

A lot has changed for 2022 tax returns, which might cause refund shock if you’re not prepared for it, because you might get a smaller tax refund than you did last year. In fact, you could even owe the IRS.

The last two tax seasons had new, bigger, and enhanced tax credits, mostly tied to COVID impact relief. Now, many of those new and enhanced tax credits have expired.

Here’s what you need to know about the biggest changes this year.

Are there changes to the Child Tax Credit in 2022?

Yes. For 2022, the Child Tax Credit (CTC) reverts back to the rules we saw in 2020. Which means no one receives advance monthly payments, and the total credit amount is smaller.

This credit also requires you to have earned income and can be limited based on the amount of earned income.

This year, the Child Tax Credit is a maximum of $2,000 per dependent child age 16 and under. A quarter of this ($500 per child) is nonrefundable—you lose it if you don’t use it on your income taxes. And three-quarters of ($1,500 per child) is refundable. What this means is, if there is any credit leftover when you complete your tax return, you can get it as part of your refund, but only up to $1,500 per child.

For comparison, last year’s credit amount was $3,000 and $3,600 for children under age 6, and it was fully refundable.

How did the Child and Dependent Care Credit change?

Similar to the Child Tax Credit, the Child and Dependent Care Credit also reverts to the 2020 rules. This year allowed expenses are maxed at $3,000 for one dependent, and $6,000 for more than one. The percentage is down to a 35% maximum and a 20% minimum on the amount paid, with most taxpayers eligible for the 20% amount. Additionally, the Child and Dependent Care Credit is nonrefundable (it is used to offset any taxes and any remaining credit is lost).

What hasn’t changed about the Child and Dependent Care Credit is that the care must be for dependent children under age 13, and other dependents unable to care for themselves while the taxpayer (and spouse on a joint return) are working.  

Are there any changes if I have self-employment income?

Yes! The biggest change for self-employed taxpayers is that more people than ever will receive a 1099-K form. You’ll get these forms if you received $600 or more in payments through a third-party vendor, like PayPal or Venmo. You’ll generally need to report this income on a Schedule C or F. When there is self-employment or gig income, you need to report every penny, so keep good records. It all goes on the tax return, even if not on a 1099-K.

If you use these third-party apps for personal transactions, like splitting a restaurant bill between friends and family, this income is generally not taxable.

Can I still write off my charitable donations this year?

This year, you can write off charitable contributions only if you itemize. That’s different than the past two years, when you could deduct some donations, even if you were filing using the standard deduction. 

Will there be more stimulus checks or a Recovery Rebate Credit?

No. Stimulus payments and the Recovery Rebate Credit were part of COVID relief packages, and they were specific to 2020 and 2021. These additional monies won’t be a part of your 2022 tax return.

How has the Earned Income Tax Credit changed in 2022?

For those without children, the Earned Income Tax Credit (EITC) has changed significantly this year. Only taxpayers who have no children and are between the ages of 25 and 65 are eligible for a maximum EITC of $560. This means seniors are no longer eligible for the EITC–unless they have dependents. 

Family size Max credit Max income to qualify
Single,  Head of Household, Qualified Widow(er)
Max income to qualify
Married Filing Jointly
3+ children $6,935 $53,057 $59,187
2 children $6,164 $49,399 $55,529
1 child $3,733 $43,492 $49,622
No children $560 $16,480 $22,610

The EITC is still a very valuable refundable credit that is overlooked by millions of taxpayers every year. In fact, the IRS believes one in five taxpayers fail to claim the EITC annually. Those who are eligible, but forget to claim it, are leaving money on the table.

How have the standard deduction amounts, minimum filing requirements, and income tax rates changed?

The IRS adjusts the standard deduction amount, the required minimum income amount to file a tax return, and income tax rates every year, based on inflation. This year, you can expect these adjustments to the standard deduction you can take.

Standard Deductions & minimum filing requirements

If your filing status is:

AND at the end of 2022 you were…

THEN file a return if the gross income was at least…

Single

Under 65

$12,950

65 or older

$14,700

Married Filing Jointly

Under 65

$25,900

65 or older (one spouse)

$27,300

65 or older (both spouses)

$28,700

Married Filing Separately

Any age

$5

Head of Household

Under 65

$19,400

65 or older

$21,150

Qualifying Widow(er) with dependent children

Under 65

$25,900

65 or older

$27,300

Tax rates changed, too. Talk to your Tax Pro to find out how much you can expect to pay.

What do life changes affect taxes?

While there are major changes for tax year 2022 that will impact your refund, you should know that life changes impact your tax return the most. If you have any of the following changes this year (through December 31, 2022, your 2022 tax return will probably change:

  • Got married or divorced
  • Had a baby or adopted a child
  • Bought or sold a home
  • Retired
  • Moved

Why wait until you file to learn how your personal 2022 tax return will change compared to last year? Schedule an appointment with a Jackson Hewitt Tax Pro today.

About the Author

Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.

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