Tax preparation company urges taxpayers to complete mid-year tax audit to avoid surprises when filing taxes, shares biggest changes this year so far
JERSEY CITY, NJ, July 12, 2022 /PRNewswire/ — The past few years have been tremendously good for millions of taxpayers who have received large tax refunds, but this tax season will be very different. Jackson Hewitt Tax Services® warns taxpayers that they could risk refund shock and receive a smaller refund this year. Or worse, they might owe the IRS. Tax preparation company encourages taxpayers to schedule a mid-year tax audit to understand their situation and make any changes that may benefit them, to avoid shock reimbursement during reporting season early next year.
“While most people don’t think about their taxes until the end of the year, July is a great time to schedule a mid-year tax planning appointment, especially this year when many taxpayers are at risk of repayment shock,” says Marc Steber, director of tax information at Jackson Hewitt. “My advice: plan now, stay on top of changes that will impact you and your family, and work with an experienced tax professional who has your best interests in mind.”
To perform a mid-year tax audit, Steber says taxpayers should review a few things to better understand their situation in 2022, including last year’s tax return, a summary of the current 2022 income amount, and an awareness of the notable personal changes of the year. – such as a change in dependents, a change in employment or self-employment earnings, marriage or divorce – which may have an impact on their tax situation. With this information, taxpayers can calculate their mid-year tax estimate for the first half of the year and compare it to the amount of tax they paid.
“Once someone has the expected results, they need to meet with a Tax Pro to figure out how to act on them,” adds Steber. “If taxpayers see that they might have a lower refund than they expect or even a balance owing, there is still time to act. This could mean anything from increased tax deductions for the rest of the year to increased contributions to qualified pension plans, to many other strategies. Consult your local Tax Pro for answers to specific tax questions about your particular situation.”
In addition to doing a mid-year tax audit, Jackson Hewitt’s Tax Pros offer taxpayers insight into the top four things they need to know to avoid refund shock this tax year as well:
- Unlike 2020 and 2021, 2022 likely won’t have additional stimulus checks, also known as economic impact payments or recovery rebate credit. These checks were part of COVID relief programs, and the IRS has issued more than 470 million payments over the past two tax seasons. No new stimulus checks are being discussed in the legislation; therefore, taxpayers should not expect a surcharge $1,200, $600Where $1,400 per person in their tax refund.
- Several tax credits are returning to pre-COVID levels, which are comparatively weaker or limited to last year. This year taxpayers will find that the Child Tax Credit (CTC) is worth $2,000 per dependent (instead of $3,600 in 2021) – as well as no CTC monthly advance payment this year. The earned income tax credit for eligible taxpayers without children will revert to $500 of about $1,500; and the dependent care credit will go up to a maximum of $2,100 of $8,000. These credits will also revert to other age and income limits, which also means that fewer taxpayers will be eligible for these credits.
- There will be no above-the-line deduction for charitable donations for those taking the standard deduction. This deduction will revert to pre-COVID rules and will only be available to those detailing. In the past two years, taxpayers could deduct up to $600 on their tax returns.
- Every year changes in tax law bring new challenges and differences. New this year will be the impact on those who use third-party payment apps, like Venmo, Zelle, PayPal, Apple Pay and others. These apps are now required to report users to the IRS who accept more than $600 for the year in total, and will send users a Form 1099-K. This income will need to be reported on all IRS tax returns, and many taxpayers will need to pay taxes on it.
Taxpayers can learn more about how to avoid refund shock, as well as other planning tips for a smoother 2022 tax filing season by viewing Facebook Live’s “Tax Talk Live” event series. Jackson Hewitt. The first series takes place the week of July 18, 2022and will air every weekday from 12:00 p.m. to 12:15 p.m. EST: facebook.com/jacksonhewitt.
Visit jacksonhewitt.com for more information and to locate an office to schedule a mid-year review appointment.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. is an innovator in the tax industry, with a mission to provide hard-working clients with access to simple, low-cost solutions for managing their taxes and tax refunds. jackson Hewitt is dedicated to helping customers move forward and backs its work with its Maximum Money Back Guarantee and Lifetime Accuracy Guarantee® (restrictions apply, see the Jackson Hewitt website for details). Jackson Hewitt has more than 5,500 company-owned franchises and branches nationwide, including nearly 3,000 in Walmart stores as well as online tax preparation services, making it easy for customers to file and easily their tax returns. For more information on products, services and offers, or to locate a Jackson Hewitt office, visit www.jacksonhewitt.com or call 1 (800) 234-1040.
SOURCE Jackson Hewitt Tax Service Inc.
