7 IRS improvements that may have an effect on your 2022 tax return

1. Increased Standard Deduction: The IRS may adjust the standard deduction for the tax year 2022. A bigger standard deduction indicates that a greater portion of your income is exempt from federal income tax, potentially decreasing your overall tax payment.
2. Modified Tax Brackets: The IRS periodically adjusts tax brackets to account for inflation. These adjustments may result in changes to the income thresholds for each tax bracket, potentially affecting the amount of tax you owe at different income levels.
3. Updated Tax Credits: Tax credits can directly reduce your tax liability. The IRS may introduce new tax credits or modify existing ones for the tax year 2022. These changes could affect eligibility criteria, phase-out ranges, or credit amounts, potentially impacting your tax return.
4. Revised Retirement Contribution Limits: The IRS sets annual contribution limits for retirement accounts such as 401(k)s and IRAs. If the IRS raises the contribution limits for tax year 2022, you may be able to save more for retirement tax-free.
5. Enhanced Child Tax Credit: The Child Tax Credit was expanded for the tax year 2021 under the American Rescue Plan Act (ARPA). While it's important to note that this change is not permanent, the IRS may extend or modify the enhanced Child Tax Credit for the tax year 2022, potentially impacting families with qualifying dependents.
6. Altered Deduction Rules: The IRS can make changes to deduction rules, affecting what expenses you can deduct from your taxable income. For example, there could be modifications to deductions for medical expenses, state and local taxes, mortgage interest, or student loan interest, among others.
7. Improved Tax Filing Processes: The IRS continually works on improving tax filing processes, including implementing new technologies and streamlining procedures. These changes are intended to make it simpler for taxpayers to complete their returns properly and expeditiously, perhaps decreasing mistakes and delays in return processing.

It's important to note that these are potential improvements that could impact your 2022 tax return. The IRS announces any changes well in advance, and it's crucial to stay informed about the latest updates by regularly checking the IRS website or consulting with a tax professional.