Tax season begins; here are the changes to know about

Income tax season officially gets underway Monday and there are a few important changes to know about.

Experts say people may need to shift their expectations about how much of a refund they could get. That is because several popular tax breaks have changed since last year.

“We’re almost back to normal, where a lot of that relief that we had is not there anymore,” said Eric Wortzman, a Certified Public Accountant with North Hills Tax Associates.

The Child Tax Credit has a maximum of $2,000 that can be claimed for each child through the age of 16. This is for people whose adjusted gross income is below $200,000 or $400,000 if filing jointly. Last year, there were no earned income requirements and parents could claim a maximum credit of $3,600 for every child under age 6 and up to $3,000 for kids aged 6-17.

In Pennsylvania, money is now available on a state level for some parents.

“Pennsylvania never had a Child Care credit before – so now you can get a couple hundred dollars back on your tax return, and of course, like most credits, it’s income based,” Wortzman said.

So what about your Venmo, Paypal or CashApp accounts? Less than a month ago, the IRS delayed a new tax policy that would require users of digital wallets to start reporting transactions, meaning you’d receive a 1099K form to report if you received more than $600 of income through those apps — a much lower amount than the previous $20,000 threshold. Because of the delay in policy, Wortzman said some people expecting the forms are not going to get them, but he has this advice.

“If you have income, you’re still supposed to report it. The 10-99, the whole purpose of those historically, is to make people honest,” Wortzman said. “You should have a personal Venmo and a business Venmo. The IRS does not like what we call ‘co-mingling.’”

Finally, keep track of your cryptocurrency, if that applies to your lifestyle, and gather information in advance.

“Ask yourself — ‘What did I buy? What did I sell? Did I have a gain? Did I have a loss? What kind of app was I using?” Wortzman said.

Some other advice Wotzman has for people this tax season: File an extension if you’re running out of time; reference your old tax returns; file electronically to get your return quicker; if you do mail your return, send it via Certified Mail; make your payments online; and keep track of your finances all year.

This year, April 15 falls on a Saturday, so the deadline to file 2022 taxes is April 18.

KEEP CHECKING IN WITH CHANNEL 11 FOR MORE INFORMATION ON HOW YOU SHOULD PREPARE PROPERLY PREPARE FOR TAX SEASON.

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