IRS provides tax inflation adjustments for tax year 2022

"The Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2021-45 PDF provides details about these annual adjustments.

Highlights of changes in Revenue Procedure 2021-45:

The tax year 2022 adjustments described below generally apply to tax returns filed in 2023.

The tax items for tax year 2022 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
   
• The personal exemption for tax year 2022 remains at 0, as it was for 2021, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act. 
   
• Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly).

  The other rates are:
  35%, for incomes over $215,950 ($431,900 for married couples filing jointly);
  32% for incomes over $170,050 ($340,100 for married couples filing jointly);
  24% for incomes over $89,075 ($178,150 for married couples filing jointly);
  22% for incomes over $41,775 ($83,550 for married couples filing jointly);
  12% for incomes over $10,275 ($20,550 for married couples filing jointly).
  The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).
   

• For 2022, as in 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
   
• The Alternative Minimum Tax exemption amount for tax year 2022 is $75,900 and begins to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption begins to phase out at $1,079,800). The 2021 exemption amount was $73,600 and began to phase out at $523,600 ($114,600 for married couples filing jointly for whom the exemption began to phase out at $1,047,200).
   
• The tax year 2022 maximum Earned Income Tax Credit amount is $6,935 for qualifying taxpayers who have three or more qualifying children, up from $6,728 for tax year 2021. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
   
• For tax year 2022, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $280.
   
• For the taxable years beginning in 2022, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $2,850. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $570, an increase of $20 from taxable years beginning in 2021.
   
• For tax year 2022, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,450, up $50 from tax year 2021; but not more than $3,700, an increase of $100 from tax year 2021. For self-only coverage, the maximum out-of-pocket expense amount is $4,950, up $150 from 2021. For tax year 2022, for family coverage, the annual deductible is not less than $4,950, up from $4,800 in 2021; however, the deductible cannot be more than $7,400, up $250 from the limit for tax year 2021. For family coverage, the out-of-pocket expense limit is $9,050 for tax year 2022, an increase of $300 from tax year 2021.
   
• The modified adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after December 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
   
• For tax year 2022, the foreign earned income exclusion is $112,000 up from $108,700 for tax year 2021.
   
• Estates of decedents who die during 2022 have a basic exclusion amount of $12,060,000, up from a total of $11,700,000 for estates of decedents who died in 2021.
   
• The annual exclusion for gifts increases to $16,000 for calendar year 2022, up from $15,000 for calendar year 2021.
   
• The maximum credit allowed for adoptions for tax year 2022 is the amount of qualified adoption expenses up to $14,890, up from $14,440 for 2021.."
  Tax inflation adjustments 

Updated Withholding Calculator, Form W-4 Released; Calculator Helps Taxpayers Review Withholding Following New Tax Law

"The Internal Revenue Service today released an updated Withholding Calculator on IRS.gov and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December.

The IRS urges taxpayers to use these tools to make sure they have the right amount of tax taken out of their paychecks.

“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.

If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.

“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.”

The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year..."

IRS withholding calculator

IRS Criminal Enforcement Slides

"As Congress continues to reduce its overall support of the Internal Revenue Service (IRS), the chances that the IRS will at some point recommend a taxpayer for criminal prosecution have significantly declined — from 13.3 per million population in FY 2013 to 9.2 per million in FY 2015. This level is the lowest seen during the Obama Administration.

The reduction in the number of IRS matters referred to federal prosecutors appears to be directly related to the drop in the number of the agency's criminal investigators, which has been cut back 16 percent over the last five years..."

IRS

Directory of Federal Tax Return Preparers with Credentials and Select Qualifications

"Anyone with a Preparer Tax Identification Number (PTIN) can prepare a tax return for a client. However, tax return preparers have differing levels of skills, education and expertise. This searchable directory is intended to help you with your choice by providing a listing of preparers in your area who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion.

Understanding Tax Return Preparer Credentials and Qualifications can help you learn more about the different types of tax professionals.

Choosing a Tax Professional provides more guidance for making this important choice..."

Taxes

Free Tax Return Preparation for Qualifying Taxpayers

"The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $53,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals.
In addition to VITA, the Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. The IRS-certified volunteers who provide tax counseling are often retired individuals associated with non-profit organizations that receive grants from the IRS.
Before going to a VITA or TCE site, see Publication 3676-B for services provided and check out the What to Bring page to ensure you have all the required documents and information our volunteers will need to help you. *Note: available services can vary at each site due to the availability of volunteers certified with the tax law expertise required for your return.
Find a VITA or TCE Site Near You

VITA and TCE sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations across the country. To locate the nearest VITA or TCE site near you, use the VITA Locator Tool or call 800-906-9887..."

Free Tax Preparation

Choosing a Tax Professional

"A tax return preparer is trusted with your most personal information. They know about your marriage, your income, your children and your social security numbers – the details of your financial life.
Most tax return preparers provide outstanding service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer.
Anyone can be a paid tax return preparer as long as they have an IRS Preparer Tax Identification Number (PTIN) and they sign and enter it on all returns they prepare.  However, tax return preparers have differing levels of skills, education and expertise.
Choose wisely when selecting a paid tax return preparer. For assistance see:

• Directory of Federal Tax Return Preparers with Credentials and Select Qualifications -- NEW!
• Which tax preparer is right for me? Explaining enrolled agents, CPAs, attorneys, and others.
• Do some tax return preparers belong to professional organizations?
• IRS tips for choosing a tax preparer.
• Watch a video on choosing a preparer.
• When, and how, do I file a complaint about a tax preparer?.."

Tax Professionals

IRS Launches Directory of Federal Tax Return Preparers; Online Tool Offers New Option to Help Taxpayer

" The Internal Revenue Service today announced the launch of a new, online public directory of tax return preparers. This searchable directory on IRS.gov will help taxpayers find a tax professional with credentials and select qualifications to help them prepare their tax returns.


The directory is a searchable, sortable listing featuring:  the name, city, state and zip code of attorneys, CPAs, enrolled agents and those who have completed the requirements for the voluntary IRS Annual Filing Season Program. All preparers listed also have valid 2015 Preparer Tax Identification Numbers (PTIN).

Taxpayers may search the directory using the preferred credentials or qualifications they seek in a preparer, or by a preparer’s location, including professionals who practice abroad. Tax return preparers with PTINs who are not attorneys, CPAs, enrolled agents or Annual Filing Season Program participants are not included in the directory, nor are volunteer tax return preparers who offer free services..."

Directory of Federal Tax Preparers

Ten IRS Tips to Help You Choose a Tax Preparer

"Many people pay to have their taxes prepared. You need to be careful when you pick a preparer to do your taxes. You are legally responsible for all the information on the tax return even if someone else prepares it. Here are 10 IRS tax tips to help you choose a tax preparer:

Check the preparer’s qualifications.  All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. The IRS will soon offer a new Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on IRS.gov. You will be able to use this tool to help you find a tax return preparer with the qualifications that you prefer. The Directory will be a searchable and sortable listing of certain preparers with a valid PTIN for 2015. It will include the name, city, state and zip code of:

• Attorneys.
• CPAs.
• Enrolled Agents.
• Enrolled Retirement Plan Agents.
• Enrolled Actuaries. 
• Annual Filing Season Program participants .."
• Tax preparers

Tax Havens: International Tax Avoidance and Evasion

"Addressing tax evasion and avoidance through use of tax havens has been the subject of a number

of proposals in Congress and by the President. Actions by the Organization for Economic Cooperation and Development (OECD) and the G-20 industrialized nations also have addressed this issue. In the 111 thCongress, the HIRE Act (P.L. 111-147) included several anti-evasion provisions, and P.L. 111-226 included foreign tax credit provisions directed at perceived abuses by U.S. multinationals. Numerous legislative proposals to address both individual tax evasion and corporate tax avoidance have been advanced..."

Tax havens

Tax ID Theft Tops FTC Complaints in 2014

"Tax-related identity theft was the most common form of identity theft reported to the Federal Trade Commission in 2014, while the number of complaints from consumers about criminals impersonating IRS officials was nearly 24 times more than in 2013, according to FTC statistics released today.

The FTC, along with the Department of Veterans’ Affairs, Treasury Inspector General for Tax Administration, the AARP, and other partners are holding a series of events this week designed to educate consumers about these issues as part of Tax Identity Theft Awareness Week, which begins today and runs through Jan. 30..."
Tax identity theft

CRS Report for Congress Prepared for Members and Committees of Congress The Corporate Income Tax System: Overview and Options for Reform

"Many economists and policymakers believe that the U.S. corporate tax system is in need of

reform. There is, however, disagreement over why the corporate tax system needs to be reformed,

and what specific policy measures should be included in a reform. To assist policymakers in

designing and evaluating corporate tax proposals, this report (1) briefly reviews the current U.S.

corporate tax system; (2) discusses economic factors that may be considered in the corporate tax

reform debate; and (3) presents corporate tax reform policy options, including a brief discussion

of current corporate tax reform proposals.."Corporate income tax

Overview of the Federal tax Sysem

"The major sources of federal tax revenue are individual income taxes, Social Security and other

payroll taxes, corporate income taxes, excise taxes, and estate and gift taxes. This report describes

the federal tax structure, provides some statistics on the tax system as a whole, and presents

analysis of selected tax concepts..."

Federal Tax System

Get Transcript (IRS)

"Get a record of your past tax returns, also referred to as transcripts. IRS transcripts are often used to validate income and tax filing status for mortgage applications, student and small business loan applications, and during tax preparation.
You can download and print your transcript immediately, or request the transcript be mailed to your address on record..."
Get-Transcript

Offshore Profit Shifting and the U.S. Tax Code - Part 2 (Apple Inc.)

Find the text  of the Apple hearings before the U.S. Senate Permanent Committee on Homeland Security and Government Affairs, May 21, 2013.
Offshore Profit Shifting and the U.S. Tax Code - Part 2 (Apple, Inc)

Eight Tax-Time Errors to Avoid

 Tax errors from the U.S. Internal Revenue Service
Eight Tax-Time Errors to Avoid

Dirty Dozen Tax Scams for 2013

"The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.
The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns..."
Dirty Dozen Tax Scams 2013

Guns, Excise Taxes, and Wildlife Restoration

"As a result of the recent debate over guns, gun rights, and gun-related violence, there has
been a marked increase in sales of many weapons as well as ammunition. Through an
excise tax on firearms and ammunition, such sales have a marked beneficial effect on
funding for state wildlife programs through the Wildlife Restoration Program (also known as
Pittman-Robertson or P-R). This report examines these taxes, their allocation, and their use. It
also examines the effects of sequestration of this account, pursuant to the Budget Control Act of 2011 (BCA, P.L. 112-25)..."
https://www.fas.org/sgp/crs/misc/R42992.pdf

Missing W-2

Discover how to get a missing W-2 form.
Missing W-2

Options for Taxing U.S. Multinational Corporations

"In 2008, 12 percent of all federal revenues came from corporate income taxes; about half was paid by multinational corporations reporting income from foreign countries.1 How the federal government taxes U.S.
multinational corporations has consequences for the U.S. economy overall as well as for the federal budget..."
Options for Taxing U.S. Multinational Corporations

TOPPLING OFF THE FISCAL CLIFF: WHOSE TAXES RISE AND HOW MUCH?

"The fiscal cliff threatens an unprecedented tax increase at year end. Taxes would rise by more than $500 billion in 2013—an average of almost $3,500 per household—as almost every tax cut enacted since 2001 would expire. Middle-income households would see an average increase of almost $2,000. Policymakers are rightly concerned about the potential impact on families and the economy of such a sudden tax increase and are considering proposals to delay, repeal, or offset parts of the cliff. To inform that discussion, this report provides a detailed look at the revenue, distributional, and incentive effects of these increases. Almost 90 percent of Americans would see their taxes rise if we topple off the cliff. For most households, the two biggest increases would be the expiration of the temporary cut in Social Security taxes and the expiration of the 2001/2003 tax cuts. Households with low incomes would be particularly affected by the expiration of tax credits expanded or created by the 2009 stimulus. And households with high incomes would be hit hard by the expiration of the 2001/2003 tax cuts that apply at upper income levels and the start of the new health reform taxes. Taken together, the scheduled changes would significantly increase the marginal tax rates that can influence behavior. Average marginal tax rates would increase by 5 percentage points on labor income, by 7 points on capital gains, and by more than 20 points on dividends..."
http://www.taxpolicycenter.org/UploadedPDF/412666-toppling-off-the-fiscal-cliff.pdf