NEWS LETTER December 15th, 2022 by AUSTIN TAX SERVICES INC., 910 Portland Ave, Gladstone, OR 97027
Office Phone 503 657-0039; Fax 503 650-8888; Website www.AustinTaxServicesInc.com

     This has been a difficult year for our nation. Unfortunately, most tax filers will see an increase in their taxes to the federal government this year, unless congress intervenes on the expired tax enactments of 2021. Here are some of the items that have expired: the child tax credit will change from $3,600 per child to $2,000 per child, which may have a big impact on those with dependents. The special charitable deduction for non-itemizers is gone. Federal stimulus payments are gone, although many states may still be giving various ones. Also, it does not look like there will be an Oregon kicker on the 2022 tax returns. If you receive payment of more than $600 in 2022 for goods or services through a third-party payment network such as Paypal, Amazon, Venmo or others, you will more than likely receive a form 1099-K from your payment network. This is due to a new tax reporting rule that now requires third party payment networks to send a 1099-K if those payments exceed the $600 threshold (there has been some talk about this requirement being held off until next year). Please note that the new reporting threshold does not change the fact that the IRS has always required taxpayers to report all taxable income, whether they receive a 1099-K form or not. Personal transactions (payments to friends and family) on the payment networks are not considered payments for goods and services, so you should not receive any 1099-Ks for those transactions. From the IRS: beware of scam text messages on Covid relief and tax credits. Some of these phony texts offer to set up online IRS accounts. Many of them ask you to click on links which take you to imposter websites, where they can attempt to steal your financial information or send malicious code to your phone. The Inflation Reduction Act gives IRS $80 billion over 10 years to be used for enforcement and collection activities, operations support, modernizing business systems and improving taxpayer service. Some of that money has already been used by the IRS to hire over 4,000 new customer service workers as of October of this year, and they plan on hiring 1,000 additional workers by year end. Some of you may have found that it was extremely difficult to contact the IRS by phone. Hopefully, this action will allow taxpayers to contact IRS staff with a 50% reduction in wait time. For anyone with student loan debt relief in 2022, it is not taxable to the federal government, nor Oregon, because it is connected to federal tax law. For those with required minimum distributions, be sure to calculate and take out the correct minimum amount, since any shortfall will be subject to a 50% penalty. IRA contribution limits for 2022 remain at $6000 ($7000 for those age 50 or over as of 12/31/22) and must be made by April 15, 2023. Standard mileage rates for 2022: business, farms & rentals 58.5 cents/mi January-June, 62.5 cents/mi July-December; medical & moving 18.0 cents/mi January-June, 22.0 cents/mi July-December; charitable remains at 14.0 cents/mi. Be sure to keep a mileage log and record with beginning and ending odometer readings for each deductible trip you drive during the year.  Also, record beginning of year and end of year odometer readings on each vehicle you own, since this deduction requires total yearly miles driven in order to calculate percentage of business use. Tax planning for the 2022 year end for those of you who itemize deductions on federal or Oregon returns: 1) Pay your January 2023 mortgage bill before year-end. 2) If you are under the $10,000 cap on state and local taxes, and your locale allows it, pay the property tax bill (due in January 2023) in December. 3) Put charitable organization checks in the mail before year end. 4) If you have high medical costs and you are sure you have topped the 7.5% of adjusted gross income threshold, pay any additional medical costs before year end.

We are looking forward to helping you with your taxpayer needs. Please remember that we meet with only one client or couple at a time, by pre-scheduled appointment, and we do not take walk-ins.  If you prefer a contactless method, you may drop off your information in our mail slot, and we will contact you for a phone interview. Our best wishes for a safe and successful year!