GETTING READY FOR THE TAX DAY

Use these tips to assist your planning for the  appointment

What you should get ready for the appointment?

Required documents to keep on file:

  • Copies of Drivers License or State IDs
  • Social Security Cards
  • Proof of Residence for dependents claiming EIC

Income documents:

  • Income from jobs: forms W-2 for you and your spouse
  • Investment income—various forms 1099 (-INT, -DIV, -B, etc.), K-1s, stock option information
  • Income from state and local income tax refunds and/or unemployment: forms 1099-G
  • Taxable alimony received
  • Business or farming income—profit/loss statement, capital equipment information
  • If you use your home for business—home size, office size, home expenses, office expenses
  • IRA/pension distributions—forms 1099-R, 8606
  • Rental property income/expense—profit/Loss statement, rental property suspended loss information
  • Social Security benefits—forms SSA-1099
  • Income from sales of property—original cost and cost of improvements, escrow closing statement, cancelled debt information (form 1099-C)
  • Prior year installment sale information—forms 6252, principal and Interest collected during the year, SSN and address of payer
  • Other miscellaneous income—jury duty, gambling winnings, Medical Savings Account (MSA), scholarships, etc.

 

(Utilize our helpful IRS archive look apparatus for your records)

How can I check on my tax refundsTax Related Web-sites/phone numbers: IRS www.irs.gov IRS Get Discount Status IRS Request Phone: (800) 829-1040

Other tax documents:

  • IRA contributions
  • Energy credits
  • Student loan interest
  • Medical Savings Account (MSA) contributions
  • Moving expenses (for tax years prior to 2018 only)
  • Self-employed health insurance payments
  • Keogh, SEP, SIMPLE and other self-employed pension plans
  • Alimony paid that is tax dedcutible
  • Educator expenses
  • State and local income taxes paid
  • Real estate taxes paid
  • Personal property taxes—vehicle license fee based on value
  • Estimated tax payment made during the year, prior year refund applied to current year, and any amount paid with an extension to file.
  • Direct deposit information—routing and account numbers

Foreign bank account information—location, name of bank, account number, peak value of account during the year

Tax deduction documents:

  • Advance Child Tax Credit payment
  • Letter 6419, Advance Child Tax Credit Reconciliation
  • If you received ‘Your Third Economic Impact Payment’, Letter 6475
  • Child care costs—provider’s name, address, tax id, and amount paid
  • Education costs—forms 1098-T, education expenses
  • Adoption costs—SSN of child, legal, medical, and transportation costs
  • Home mortgage interest and points you paid—Forms 1098
  • Investment interest expense
  • Charitable donations—cash amounts and value of donated property, miles driven, and out-of-pocket expenses
  • Casualty and theft losses—amount of damage, insurance reimbursements
  • Other miscellaneous tax deductions—union dues, unreimbursed employee expenses (uniforms, supplies, seminars, continuing education, publications, travel, etc.)  (for tax years prior to 2018 only) Medical and dental expenses

 

CURRENT TAX RATES
Current rates information given by IRS

2022 Tax Brackets
Income Tax Brackets and Rates

2022 income limits for all tax brackets and all filers, adjusted for inflation. Seven government pay tax rates in 2022 are as takes 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The marginal income tax rate of 37 percent will as it were apply to taxpayers with taxable income over $539,900 (single filers), and $647,850 is the target for married couples filing jointly…(SEE Table 1)

 

Rates Single Individuals - Taxable Income Over Married Individuals Filing Joint Returns - Taxable Income Over Heads of Households - Taxable Income Over
10% Up to $10,275 Up to $20,550 Up to $14,650
12% $10,275 to $41,775 $20,550 to $83,550 $14,650 to $55,900
22%

$41,775 to

$89,075

$83,550 to

$178,150

$55,900 to

$89,050

24%

$89,075 to

$170,050

$178,150 to

$340,100

$89,050 to

$170,050

32%

$170,050 to

$215,950

$340,100 to

$431,900

$170,050 to

$215,950

35%

$215,950 to

$539,900

$431,900 to

$647,850

$215,950 to

$539,900

37%

Over $539,900

Over $647,850 Over $539,900

Standard Deduction and Individual Exemption

Standard deductions for single filers have expanded by $400; $800 for married couples recording mutually. The individual exclusion for 2022 remains killed (this can be due to the individual exception from the Tax Cuts and Occupations Act 2017  )

 

Table 2. 2022 Standard Deduction and Personal Exemption (Source: IRS)

Filing Status Deduction Amount
Single   $12,950
Married Filing Jointly   $25,900
Head of Household   $19,400

 

.

Alternative Minimum Tax

Made in the 1960s, The Alternative Minimum Tax (AMT) was set up to avoid high-income citizens from dodging the individual income tax. This parallel tax income framework requires high-income taxpayers to calculate their tax bill twice: once beneath the conventional income tax framework and once more beneath the AMT. The taxpayer at that point has to pay the higher of the two. More data can be found at IRS.Gov (SEE Table 3).

Table 3. 2022 Alternative Minimum Tax Exemptions (Source: IRS)

Filing Status Exemption Amount
Unmarried Individuals   $75,900
Married Filing Jointly   $118,100

 

.

In 2022, the 28% AMT rate applies to an overabundance AMTI of $206,100 for all citizens ($103,050 for married couples recording partitioned returns).

AMT exceptions stage out at 25 cents per dollar earned once taxpayer AMTI hits a certain limit. In 2022, the exclusion will begin staging out at $539,900 in AMTI for single filers and $1,079,800 for hitched citizens recording mutually (SEE Table 4).

2021 Tax Brackets
Income Tax Brackets and Rates

Income Tax Brackets and Rates For 2021, income limits for all tax brackets as well as all filers will be adjusted for inflation and will be as taken after… The best marginal income tax rate of 37 percent will hit taxpayers with a taxable income of $523,600 and higher for single filers and $628,300 and higher for married couples filing jointly…(SEE Table 1)

As you survey the brackets, the income ranges for each rate have been adjusted for inflation.

 

Rates Single Individuals - Taxable Income Over Married Individuals Filing Joint Returns - Taxable Income Over Heads of Households - Taxable Income Over
10%

Up to

$9,950

Up to $19,900 Up to $14,200
12%

$10,275

to $41,775

$19,901 to $81,050

$14,201 to

$54,200

22%

$40,526 to

$86,375

$81,051 to $172,750

$54,201 to

$86,350

24%

$86,376 to

$164,925

$172,751 to $329,850

$86,351 to

$164,900

32%

$164,926 to

$209,425

$329,851 to $418,850

$164,901 to

$209,400

35%

$209,426 to

$523,600

$418,851 to $628,300

$209,401 to

$523,600

37% Over $523,600 Over $628,300

Over $523,600

Standard Deduction and Individual Exemption

Standard deductions for single filers have expanded by $150; $300 for married couples recording together (SEE Table 2). The individual exception for 2021 remains eliminated.

 

Table 2. 2022 Standard Deduction and Personal Exemption (Source: IRS)

Filing Status Deduction Amount
Single   $12,500
Married Filing Jointly   $25,100
Head of Household   $18,800 

 

.

Alternative Minimum Tax

Made in the 1960s, The Alternative Minimum Tax (AMT) was set up to avoid high-income citizens from dodging the individual income tax. This parallel tax income framework requires high-income taxpayers to calculate their tax bill twice: once beneath the conventional income tax framework and once more beneath the AMT. The taxpayer at that point has to pay the higher of the two. More data can be found at IRS.Gov (SEE Table 3).

Table 3. 2022 Alternative Minimum Tax Exemptions (Source: IRS)

Filing Status Exemption Amount
Unmarried Individuals   $73,600
Married Filing Jointly   $114,600

 

.

In 2021, the 28 percent AMT rate applies to an overabundance AMTI of $199,900 for all citizens ($99,950 for married couples filing separate returns).

AMT exclusions stage out at 25 cents per dollar earned once citizen AMTI hits a certain limit. In 2021, the exception will begin staging out at $523,600 in AMTI for single filers and $1,047,200 for married citizens recording together (SEE Table 4).

Table 4. 2022 Alternative Minimum Tax Exemption Phaseout Thresholds

Filing Status Threshold
Unmarried Individuals   $539,900
Married Filing Jointly   $1,079,800

 

.

Earned Income Tax Credit

The 2022 Most extreme Earned Income Tax Credit (EITC) for single and joint filers is $560 (no children) (SEE Table 5). The most extreme credit is $3,733 for one child, $6,164 for two children, and $6,935 for three or more children. These are little increments compared to 2021.

Table 5. 2022 Earned Income Tax Credit Parameters

Filing Status

Single or

Head of

Household

No

Children

One

Child

Two

 Children

Three

or More

Children

Income at

Max Credit

 $7,320  $10,980  $15,410  $15,410

Maximum

Credit

 $560   $3,733  $6,164  $6,935

Phaseout

Begins

 $9,160    $20,130  $20,130  $20,130
Phaseout Ends (Credit Equals 0 (Zero))

 $16,480

   $43,492  $49,399      $53,057
Married Filing Jointly      

Income at

Max Credit

 $7,320  $10,980  $15,410  $15,410

Maximum

Credit

$560
 $3,733  $6,164 $6,935

Phaseout

Begins

$15,920  $26,260  $26,260 $26,260
Phaseout Ends (Credit Equals Zero) $22,610  $49,622 $55,529 $59,187

 

.

Qualified Business Income Deduction

The Tax Cuts and Employments Act incorporates a 20 percent conclusion in 2022 for pass-through businesses with $170,050 of qualified commerce pay for single citizens and $340,100 for married citizens filing together (SEE Table 6).

Table 3. 2022 Alternative Minimum Tax Exemptions (Source: IRS)

Filing Status Exemption Amount
Unmarried Individuals   $75,900
Married Filing Jointly   $118,100

 

.

Table 3. 2022 Alternative Minimum Tax Exemptions (Source: IRS)

Filing Status Exemption Amount
Unmarried Individuals   $75,900
Married Filing Jointly   $118,100

 

.

Earned Income Tax Credit

Greatest Earned Income Tax Credit in 2021 for single and joint filers is $1,502, in the event that the filer has no children (SEE Table 5). The greatest credit is $3,618 for one child, $5,980 for two children, and $6,728 for three or more children. These are little increments compared to 2020.

Table 5. 2022 Earned Income Tax Credit Parameters

Filing Status

Single or

Head of

Household

No

Children

One

Child

Two

 Children

Three

or More

Children

Income at

Max Credit

 $7,100  $10,640  $14,950  $15,410

Maximum

Credit

 $1,502   $3,618  $5,980  $6,935

Phaseout

Begins

 $8,880   $19,520  $19,520  $20,130
Phaseout Ends (Credit Equals 0 (Zero))

 $15,980

  $42,158  $47,915   $53,057
Married Filing Jointly      

Income at

Max Credit

 $7,100   $10,640  $14,950  $15,410

Maximum

Credit

 $1,502  $3,618  $5,980  $6,935

Phaseout

Begins

 $14,820  $25,470  $25,470  $26,260
Phaseout Ends (Credit Equals Zero)  $21,920  $48,108  $53,865  $59,187

 

.

Qualified Business Income Deduction

The Tax Cuts and Occupations Act incorporates a 20 percent conclusion for pass-through businesses against up to $163,300 of qualified business income for single taxpayers and $326,600 for married citizens filing mutually (SEE Table 6).

Table 6. 2022 Qualified Business Income Deduction Thresholds (Source: IRS)

Filing Status Threshold
Unmarried Individuals   $164,900
Married Filing Jointly   $329,800

 

.

Child Tax Credit

The greatest Child Tax Credit for 2022 is $2,000 per child who qualifies and isn’t balanced for inflation. The portion refundable for the Child Tax Credit is adjusted for inflation and will increase from $1,400 to $1,500 in 2022.

2022 Yearly Prohibition for Gifts

For 2022, the primary $16,000 of gifts to any individual is prohibited from tax, up from $15,000 in 2021. This prohibition is expanded to $164,000 from $159,000 for endowments to companions who are not citizens of the United States.

2022 Capital Gains Tax Rates & Brackets (Long-term Capital Gains)

Capital Gains, long term, are taxed utilizing diverse rates and brackets compared to standard income.

Table 3. 2022 Alternative Minimum Tax Exemptions (Source: IRS)

Filing Status Exemption Amount
Unmarried Individuals   $75,900
Married Filing Jointly   $118,100

 

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Tax Records Retention

Tax record maintenance times

WHEN IN Doubt, Do not Toss IT OUT

Government law requires you to preserve duplicates of your tax returns and supporting documents for three a long timeTypically called the “three-year law” and leads numerous Individuals to accept they’re secure given they retain their documents for this period of time. Indeed in case, the initial records are given as it were on paper, they can be checked and changed over to a computerized arrangement. Once the records are in an electronic framecitizens can download them to a reinforcement capacity gadget, such as an outside difficult drive, or burn them onto a CD or DVD (do not disregard to name it). Make a Reinforcement Set of Records and Store Them Electronically. Keeping a reinforcement set of records — counting, for illustration, bank explanations, tax returns, insurance approaches, etc. — is simpler than ever presently that numerous financial institutions give explanations and archives electronically, and many monetary data is accessible on the Web. You might moreover consider online reinforcement, which is as it were way to guarantee that information is completely ensured. With  online backuprecords are put away in another locale of the nation, so that on the off chance that a typhoon or other common disaster happensdocuments stay secure.

CautionPersonality theft is a serious risk in today’s world, and it is imperative to require each safety measure to maintain a strategic distance from it. After it is not vital to hold your tax records, financial statements, or any other reports along with your personal data, you ought to arrange these records by destroying them and not arranging them by just tossing them away within the waste.

In any case, in the event that the IRS believes you have got essentially underreported your income (by 25 percent or more), or believe there may be sign of extortion, it may go back six a long time in a review. To be secure, use the following guidelines

Business Documents To Keep For One Year

  • Correspondence with Customers and Vendors
  • Duplicate Deposit Slips
  • Purchase Orders (other than Purchasing Department copy)
  • Receiving Sheets
  • Requisitions
  • Stenographer’s Notebooks
  • Stockroom Withdrawal Forms

Business Documents To Keep For Three Years

  • Employee Personnel Records (after termination)
  • Employment Applications
  • Expired Insurance Policies
  • General Correspondence
  • Internal Audit Reports
  • Internal Reports
  • Petty Cash Vouchers
  • Physical Inventory Tags
  • Savings Bond Registration Records of Employees
  • Time Cards For Hourly Employees

Business Documents To Keep For Six Years

  • Accident Reports, Claims
  • Accounts Payable Ledgers and Schedules
  • Accounts Receivable Ledgers and Schedules
  • Bank Statements and Reconciliations
  • Canceled Checks
  • Canceled Stock and Bond Certificates
  • Employment Tax Records
  • Expense Analysis and Expense Distribution Schedules
  • Expired Contracts, Leases
  • Expired Option Records
  • Inventories of Products, Materials, Supplies
  • Invoices to Customers
  • Notes Receivable Ledgers, Schedules
  • Payroll Records and Summaries, including payment to pensioners
  • Plant Cost Ledgers
  • Purchasing Department Copies of Purchase Orders
  • Sales Records
  • Subsidiary Ledgers
  • Time Books
  • Travel and Entertainment Records
  • Vouchers for Payments to Vendors, Employees, etc.
  • Voucher Register, Schedules
Special Circumstance

Car Records (keep until the car is sold) Credit Card Receipts (keep together with your credit card statement) Insurance Arrangements (keep for the life of the policy) Mortgages / Deeds / Leases (keep 6 a long time beyond the agreement) Pay Stubs (keep until accommodated together with your W-2) Property Records/improvement receipts (keep until property sold) Sales Receipts (keep for the life of the warranty) Stock and Bond Records (keep for 6 a long time past selling) Warranties and Informational (keep for the life of the product) Other Bills (keep until installment is confirmed on the following bill) Depreciation Plans and Other Capital Resource Records (keep for 3 a long time after the charge life of the asset)

Personal Documents To Keep For One Year

  • Bank Statements
  • Paycheck Stubs (reconcile with W-2)
  • Canceled checks
  • Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year-end statement)

Personal Documents To Keep For Three Years

  • Credit Card Statements
  • Medical Bills (in case of insurance disputes)
    Utility Records
  • Expired Insurance Policies

Personal Documents To Keep For Six Years

Supporting Documents For Tax Returns
Accident Reports and Claims
Medical Bills (if tax-related)
Property Records / Improvement Receipts
Sales Receipts
Wage Garnishments
Other Tax-Related Bills

 

Personal Records To Keep Forever

  • CPA Audit Reports
  • Legal Records
  • Important Correspondence
  • Income Tax Returns
  • Income Tax Payment Checks
  • Investment Trade Confirmations
  • Retirement and Pension Records

Business Records To Keep Forever While federal guidelines do not require you to keep tax records “forever,” in many cases there will be other reasons you’ll want to retain these documents indefinitely.

  • Audit Reports from CPAs/Accountants
  • Canceled Checks for Important Payments (especially tax payments)
  • Cash Books, Charts of Accounts
  • Contracts, Leases Currently in Effect
  • Corporate Documents (incorporation, charter, by-laws, etc.)
  • Documents substantiating fixed asset additions
  • Deeds
  • Depreciation Schedules
  • Financial Statements (Year End)
  • General and Private Ledgers, Year End Trial Balances
  • Insurance Records, Current Accident Reports, Claims, Policies
  • Investment Trade Confirmations
  • IRS Revenue Agents’ Reports
  • Journals
  • Legal Records, Correspondence and Other Important Matters
  • Minute Books of Directors and Stockholders
  • Mortgages, Bills of Sale
  • Property Appraisals by Outside Appraisers
  • Property Records
  • Retirement and Pension Records
  • Returns and Worksheets
  • Trademark and Patent Registratio
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CONTACT US

Ayuk Tax Service
11207A Lockwood Drive
Silver Spring, MD 20901
USA

PHONE: 1-301-593-4879

FAX:1-240-556-0535
EMAIL: service@ayuktaxservice.com

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