We’ve already shared a few great tips to make your 2022 tax season go smoothly in this blog article. As we get closer to January, we thought we’d share some more best practices for the 2022 tax season that can help your business save money and file without errors.
Don’t Forget Your Write-Offs
OWLLytics has a great master list of tax write-offs for 2022 tax season. Your business needs every penny it can get- either for expenses or to put towards future investments and growth.
You can write off your salaries, wages, labor, and supplies. This includes contract and freelance labor payments (typically reported using Forms 1099, specifically 1099-NEC). But everything from printer ink to advertising expenses can be written off as business expenses.
Automotive expenses, rent, utilities, all of these (whether it’s a warehouse or a home office) are also eligible for write-offs. If you have a home office, you will have to calculate the square footage and deduct the appropriate amounts as it pertains to your home mortgage, rent, utilities, and internet expenses for example.
Depending on your situation, all of the following are other deductions you could be entitled to:
- business insurance and licenses
- renter’s and health insurance
- bank and ATM fees
- professional organization memberships
- education (books, courses, workshops, online courses, etc.)
- business travel and lodging expenses
As a general note, anything you do that could be used to help or carry out your business tasks should be well-documented so you can take advantage of all these deductions and more.
Be Aware of the Latest Updates
You would be surprised how many changes are made to the tax code each year, and with the unprecedented changes we have experienced nationally and globally in 2020 and 2021, you may be able to take advantage of many changes to the personal and business aspects of your tax filing in the 2022 tax season.
We recently shared an eFile360 blog post with some small business tax news from 2021. Non-corporate business taxpayers can deduct a net trade or business loss up to $262,000 (or $524,000 for joint returns), including Schedules C, E, and F business activities. There are some changes to net operating loss and employee retention credit, which we’ll get to in the next section.
American Rescue Plan Act
Many of the biggest changes to tax year 2021 came in the form of the American Rescue Plan Act being passed.
The third round of economic impact payments went out in early 2021 but remember: this is not taxable because it’s not classified as income.
Also, The Employee Retention Credit has been extended through December 31, 2021. If your business was greatly impacted by the pandemic, with gross receipts down 90% or more compared to this quarter in 2019, you can claim this credit on all wages paid to employees who have worked during the quarter.
There are also provisions regarding COBRA, excess business losses, and 1099-K third-party reporting.
Make It Easier on You and Your Business – E-file Your Tax Forms
There are lots of changes and opportunities for you to maximize your tax deductions and returns in the 2022 tax season, while also aiming to mitigate your losses. And you can save more time – time that is better spent dedicated to your business – by filing your tax forms electronically.
Get a jump on next year’s tax prep, sign up for a free eFile360 account.