Read this first, please!
2021 saw taxpayers across America receiving individual tax refunds unlike any other time in history.
Though we generally advise that the best tax situation is to break even every year, we know that many of our clients, and most of America, rely on that annual tax refund for a 1-time annual financial windfall.
In 2021, there were stimulus checks on multiple occasions; one-time refundable child credits; incredible one-time increases in dependent care credits; tax-free unemployment; health care credits on the Marketplace unlike any other year; a mortgage insurance premium deduction; 100% charitable contribution deductions; a 1-year-only expansion of the earned income credit; a $600 charity deduction for non-itemizers; these all combined to make 2021 the watershed year for tax refunds. Last year is not a good template to base your expectations for 2022 on, as many of the tax items that pushed up those 2021 refunds will no longer be with us at the same level for 2022.
The Bottom Line
We felt it was our responsibility to warn you, in advance, to not plan for these high refunds.
Have questions about how this will impact you? Want to discuss your 2022 tax situation with your CPA? Proactive planning saves time and money – give us a call TODAY!