2022 Year In Review and Preparation for Coming Tax Season
Updated: Dec 23, 2022
The IRS reminds taxpayers there are things they should do before the current tax year ends on December 31.
Review and Understand Form 1099-K if you receive one
Previous announcement: Starting January 1, 2022, all third-party payment platforms are required to issue Forms 1099-K when payments to merchants for goods and services exceed $600.
Updated as of December 23, 2022: The IRS today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. Accordingly, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.
Money received as a gift or reimbursement of a share of a meal or rent should not be reported on a 1099-K. If it was, contact the payment platform (the issuer of your Form 1099-K) to correct the form, or let your tax preparer know.
Only business related transactions or gain from any sale of your personal assets are taxable.
Donate to Charity
Taxpayers must make any donation to a tax-exempt organization they want to deduct on their 2022 return by December 31.
IRA owners age 70½ or over have the option to transfer up to $100,000 to charity tax-free each year. These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to give to charity before the end of the year. For those who are at least 72, QCDs count toward the IRA owner's required minimum distribution for the year.
During COVID (tax year 2020 and 2021), taxpayers were able to take up to a $600 charitable donation tax deduction on their tax returns. However, for tax year 2022, taxpayers who don’t itemize and who take the standard deduction, won’t be able to deduct their charitable contributions.
Find information about retirement plans
Maximize your contribution to your IRA accounts. The contribution limit to all of your traditional IRAs and Roth IRAs for 2022 is $6,000 ($7,000 if you're age 50 or older), or, if less, your taxable compensation for the year.
Contribute salary deferral - Taxpayers can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the $20,500 limit for 2022.
Required minimum distributions (RMDs) - Individuals who reach 72 in 2022 have their first RMD due by April 1, 2023.
Consider estimated tax payments - Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2022 is due on Jan. 17, 2023.
Report virtual currency transactions on Form 1040 - If you received, sold, exchanged or otherwise disposed of any financial interest in virtual currency during 2022, you will have to report these transactions.
Check Individual Taxpayer Identification Number (ITIN) - If your and your spouse' Social Security Numbers were not used for your tax returns, check if an ITIN is needed for you and/or your spouse, and if the ITIN needs to be renewed.
View account information online - Individuals who have not set up an Online Account yet should do so soon. People who have already set up an Online Account should make sure they can still log in successfully. Taxpayers can use Online Account to securely access the latest available information about their federal tax account.