But dont get comfortable.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
Tax Day is right around the corner. Readour guideto filing your tax return in 2023.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
1.
This programming was a part of the American Rescue Plan (ARP).
But the checks stopped coming in 2022.
The ARP only included this expansion for the 2021 tax year.
Youll only get a max of $2,000 per child like you did back in 2020.
But the ARP significantly expanded the limits for the 2021 tax year.
There were no fancy percentages, but there was an income cap north of $400,000.
On top of the massive increase, in some cases, it was refundable in 2021.
So it didnt just help bring your tax bill down to $0.
It also might have put money back in your pocket.
The ARP didnt cover 2022, and no additional legislation has been passed.
COVID Sick Leave Credits Have Been Eliminated
This one was a huge deal if you were self-employed.
Self-employed individuals were able to claim this funding for themselves on their tax return.
At peak, these credits could add up to $5,110, and they were fully refundable.
Now theyre completely gone.
For that reason, there was a caretaking leave credit during 2020 and part of the year in 2021.
At their peak, these credits may have netted you up to $10,000 per year.
Like the COVID Sick Leave Credits, these were fully refundable.
And theyre also fully gone for 2022.
You do have to contribute to the state fund for participate.
The EIC is fully refundable, so this can have an outsized impact on your return.
If you were married filing jointly, the max deduction was $600.
These deductions were above-the-line, which meant they reduced your income rather than your tax burden.
The less income you have, the less money there is to tax.
For 2022, this deduction is gone.
You simply make donations directly from your IRA instead of putting the RMD into your bank account.
Then, youll be able to deduct that donation from your annual income.
Stimulus checks werent issued in 2022, so this credit is gone, too.
Need Extra (Tax) Credit?
New Provisions May Help
Not every tax credit has a direct 1:1 solution transitioning from 2021 to 2022.
But there are some provisions that affect renters both directly and indirectly.
Indirectly, the Inflation Reduction Act gives states money to run their own incentive-based green initiatives.
Its too soon yet for most of these programs to be up and running.
But we may see them more quickly implemented in progressive states where they are implemented at all.
Its extremely political, Persichitte said.
And there are some states that dont even want the free money because of their political stances.
He draws an analogy to the expansion of Medicaid funding under the Obama Administration.
To this day, 11 states still have not opted into Medicaid expansion for their citizens.
Regardless, its a good idea to check up on your states plans.
There are enough significant changes that it could alter your long-term tax strategy.
It could save you thousands of dollars.
She is a regular contributor to The Penny Hoarder.
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