"Taxes are something I am only to worry about once a year." Should this really be the case?
Over the past few years, the United States Treasury Department has taken a much greater interest in the average household. This has been through the issuance of stimulus, child tax care credits and health care.
It is important to stay up to date on what, how and, why you report certain things to the IRS. The two biggest items on the average household’s radar should be the mid-year change to the standard mileage deduction and how the IRS is going to be used to identify former students for student loan forgiveness.
The standard mileage deduction is important because with “rampant inflation” the IRS has taken a rare measure to identify the additional cost to employers as well as employees. This measure comes in the form of a change to the deduction. This change took effect on July 1st, 2022 and is now 62.5 cent per mile up from 58.5 cents per mile. For the average individual this could be an additional deduction or reimbursement of $480.
And certain student loans will be able to be forgiven based on your income being below a certain threshold. Many folks should note that if they are close to the threshold of not being able to have their loans forgiven, there are things that they can do to reduce their income. Some of these include retirement savings such as qualified retirement accounts through payroll, and health savings accounts.
Having a trusted advisor or research system (for the do it yourselfer) in place to make sure that you are aware of what is available to you is important.
Michael Solomon, Lead Accountant, CEO accountingpersonalized.com (352) 224-9530
Everyone needs to be aware of what is available to them, how the information they are reporting affects them (not just in taxation) and, why it is important to have this information as well as strategies planned out before the actual filing