What You Need to Know for 2022 Tax Filing Season
Updated: Feb 23, 2022
It is already a busy tax season, the IRS tax season began January 24th and as of February 4th, the IRS had issued 4.3 million refunds!
We want you to be prepared this tax season, here are some key items to keep in mind when filing your income tax return this year:
Deadlines
For most small businesses, including sole proprietorships, household employers, single-member LLCs, and C corporations, business taxes for the 2021 tax year are due April 18, 2022. For S corporations and partnerships, taxes are due March 15, 2022.
If you are self-employed or receive any form of income that requires you to pay estimated taxes, here are the estimated tax due dates for 2022:
April 18, 2022 – Deadline for 2022 Q1 estimated tax payments
June 15, 2022 – Deadline for 2022 Q2 estimated tax payments
September 15, 2022 – Deadline for 2022 Q3 estimated tax payments
January 17, 2023 – Deadline for 2022 Q4 estimated tax payments
E-file and Direct Deposit
Avoiding a paper tax return will be more important than ever this year due to processing delays. The IRS warned that a resurgence of COVID-19 infections on top of less funding authorization from Congress than what was requested could present a challenging filing season.
Business Meals
The Consolidated Appropriations Act, 2021, increased the business-meal deduction for the cost of food and beverages provided by a restaurant from 50% to 100% in 2021 and 2022, if certain conditions are met.
To be more specific, based on guidance issued by the IRS, businesses can claim 100% of food or beverage expenses paid to restaurants from January 1st, 2021 through December 30th, 2022 as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.
For all other entertainment and business-meal expenses, the 50% meal deduction would still apply. The change is a temporary measure intended to help the restaurant industry, which has suffered severe economic damage during the COVID-19 pandemic.
Employee Retention Tax Credit (ERTC)
The ERTC program ended in September 2021, but eligible businesses can still apply for compensation if they were eligible at the time. In fact, businesses have up to three years from the culmination of the program to conduct a lookback to determine if wages they paid after March 12th, 2020 through the end of the program are eligible.
Charitable Contributions
The CARES Act allowed taxpayers itemizing their deductions to elect to increase the amount of their charitable contributions to 100% of AGI, as opposed to the traditional 60%. This increased limitation was permitted under that Act for 2020 and 2021 but will revert to 60% this year.
Be Prepared
It’s important that you have all your business documents ready. Business documentation includes personal information, previous year’s tax return, financial reports, and proper tax forms, click here for more information on what to gather to make tax filing season a smoother process.
Even if you are seasoned business owner, it can be overwhelming to try to keep up with changes in federal tax laws, state tax laws, and small business tax deductions. You have many choices when filing your taxes, including using a trusted tax professional like us. At CPA By Choice, we prepare business taxes, understand which tax forms are required for your business, and apply all guidelines set by the IRS so your business is compliant. Allow us to take on the accounting responsibilities of your business. We are available to answer your questions, feel free to call us or send us a message.