(WQOW) – The tax season has officially begun and things may look a little different this year for taxpayers.
One big change: some tax incentives have expired, so some revenue may be lower this year.
According to the IRS website, some tax credits are returning to 2019 levels. These changes include amounts for the child tax credit, the earned income tax credit, and the child and dependent care credit. This means that if you take these tax benefits, your refund could be significantly lower than last year.
Another reason for the downsizing is the lack of new stimulus payments. 2020 and he had no new stimulus payments in 2022 unlike taxes in 2021.
More taxpayers will receive 1099K forms in 2022. This is for third party network transactions. More people are getting these forms as per the 2021 American Rescue Plan. This plan changed the reporting standards for third-party payment organizations, including payment apps such as PayPal and Venmo. The law’s new standard requires reporting of transactions of $600 annually. However, 2022 will be treated as a transition year, so these forms are only for those whose total payout exceeds his $20,000 and has more than 200 transactions.
Some of you may be worried because we split bills using things like Venmo and PayPal, or give gifts to friends and relatives, but don’t worry. These types of transactions on these apps are tax-free. This is only for apps and networks that process payments to people conducting business. Go ahead and share your happy hour tab with your friends.
This year’s submission deadline is April 18th.
More information: IRS website
Minnesota Department of Revenue
Wisconsin Department of Revenue