The ninth annual ACA open enrollment period started on November 1, 2021, and it runs through January 15, 2022. This period is longer than it has been previously. Because of that, we also wanted to run through the latest changes and updates for ACA 2022. Changes to Choices and Premiums As with previous years, marketplace premiums are changing for 2022. They will be about 3% lower than 2021. 32 more insurers are participating in the marketplace next year as well, bringing the total to 213. According to KFF, consumers in the marketplace will have a choice of almost 83 health plans in 2022, up from 46 plan choices in 2021. The American Rescue Plan Act also changed the healthcare marketplace plans and premiums. ARPA, among other things, extended eligibility for premium tax credits to include people with income levels more than 400% of the federal poverty level (FPL). When broken down, consumers on these plans end up contributing a maximum of 8.5% of their income toward the benchmark silver plan. Active Renewal Is Your Best Bet If you or your employees are currently enrolled in a 2021 marketplace plan, you can let the Open Enrollment period pass and you will automatically be moved to a similar plan for 2022. But active renewal is still your best bet when it comes to ACA 2022. If you allow the marketplace to passively enroll you in a similar program to previous years, you may end up paying more in monthly premiums because the 2022 ARPA changes aren’t optimized for your ideal plan. Extremely Low-Income Enrollment For individuals with very low income levels (up to 150% FPL), a new monthly enrollment opportunity will be available. These opportunities will include zero-premium plans with greatly reduced deductibles. State-Based Marketplaces This year, three states have launched state-based marketplaces in Kentucky, Maine, and New Mexico. The Future of ACA Marketplace Enrollment Due to a special COVID-based enrollment period that ended in August of …
2022 Tax Deadlines to Mark on Your Calendar
The 2022 tax season is just around the corner. To help you get ready, we wanted to put together a list of the most important 2022 tax deadlines that affect you and your business. 2021 Remaining Deadlines As we look toward 2022, there are still a few deadlines and windows in the remainder of 2021. The Open Enrollment window for Marketplace Insurance tied to the Affordable Care Act runs from November 1, 2021, to January 15, 2022. If you want your insurance to take effect immediately on January 1st, you need to select your plan by December 15, 2021. Another deadline yet not past in 2021 is the deadline to maximize 401k contributions. You can still make contributions up to and including December 31, 2021. IRS Publication 509 In the draft IRS Publication 509, the Internal Revenue Service outlines some of the newest changes and reminders for the 2022 tax season. Some of those reminders include: Payment of Deferred Employer or Employee Share of Social Security Tax of 2020: If you are an employer or employee who deferred paying their share of social security or railroad retirement tax equivalent in 2020, 50% of the share is to be made by January 3, 2022, and then applied against the payment due on January 3, 2023. Useful Publications: lists are included to help you navigate the previous IRS publications that pertain to employers, farmers, individuals, and those required to pay excise taxes. W-2s and 1099-NEC There are currently no changes to the process or form make-up as it pertains to the 1099-NEC that reports non-employee compensation. The deadline for these to be sent out is January 31, 2022. Tax Year Deadlines For employers, the due date for December 2021’s social security, Medicare, and withheld income tax is January 18, 2022, if the monthly deposit rule applies. The subsequent monthly deadlines fall on the following dates in 2022: February 15, March 15, April 18, May 16, June 15, July 15, August 15, September 15, October 17, November 15, …
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Get Ready for 2022 Tax Season: Best Practices
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 …
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Tax Breaks for Tax Year 2021
2020 made us all look long and hard at the current state of our business industries and our personal finances. And with that came new laws and tax breaks that you may be eligible for. Charitable Contribution Tax Breaks The Taxpayer Certainty and Disaster Relief Act of 2020 allows you to take up to $300 in charitable contributions as a tax deduction for the tax years 2020 and 2021, without itemizing. This change was made to help charities that were struggling during the pandemic, which means your charitable giving benefits you while also helping spur more momentum for philanthropy in these difficult times. It’s also worth noting that if you are able to itemize your charitable giving, the CARES Act allows you to deduct 100% of your adjusted Gross Income (AGI) in 2021, rather than the standard 60% deduction rate. Credit for Health Insurance Costs If your medical expenses exceed 7.5% of your AGI, and you itemize your deductions, you can deduct them. This percentage was set to go up in 2021 to 10%, but the passing of the latest act made this lower rate permanent. Medical expenses could include things like medical office fees, dental expenses, copays, health insurance payments, eyeglasses and eye exams, and more. You can also get a refundable credit (known as the HCTC or health coverage tax credit) that equals 72.5% of premiums paid by certain taxpayers for coverage of the individual and any qualifying family members under qualified health insurance. Temporary – Full Deduction of Business Meals For 2021 and 2022, the Taxpayer Certainty and Disaster Relief Act has provided a 100% deduction for business meal food and beverage expenses, which is a big jump from previous years where the standard deduction was 50%. Keep in mind, this provision is still considered temporary. Saver’s Tax Credit If you are 18 or older and you make eligible contributions to your IRA or employer-sponsored retirement plan in tax year 2021, you can claim 10%, 20%, or 50% of your …
Interesting Tax Facts
Just as there are tons of weird and interesting laws in place all over the world, there are also tons of interesting tax facts! We’ve collected a list of facts from the US and the world. Use this fun knowledge to shock a friend or impress a colleague. Historical Tax Facts Lady Godiva took her famous 11th century ride because of high taxes. She pleaded with her husband Leofric, Earl of Mercia, to lessen the burden on his subjects. He made her a bargain: he’d lower the taxes if she rode through the town naked. And she did. Federal tax returns weren’t always due on April 15th. In 1913, it was March 1st, and in 1918 it moved to March 15. The April 15th due date was adopted in 1954. Employers have only been withholding income taxes from employees’ paychecks since the Current tax Payment Act of 1943. Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Madison Square Garden, the New York entertainment venue, has not had to pay property taxes since 1982. In 1696, a window tax was introduced in England and Wales. It was assessed as a flat property tax plus a tax based on the number of windows a home had. As a result, some people bricked up their windows. In the 1800s, single men in Missouri had to pay a “bachelor tax” of $1 annually – equivalent to $20 today. Tax Facts about Food Maine has a special tax on blueberries. It reads: “There is levied and imposed a tax at the rate of 1 1/2 cents per pound on all wild blueberries processed in the State and on all unprocessed wild blueberries shipped to a destination outside the State.” Maine produces about 99% of the United States’ wild blueberries. Illinois, Colorado, and Washington all have a candy tax, but their definition of candy is specifically described as having an absence of flour. This means gummy bears are taxed as candy, while Kit Kats and Whoppers are not. For more, check out this article about the candy tax from NPR. In New York City, bagels are …
5 Tax Hacks for Small Businesses
Running a small business is an Olympian feat, so why not take the easy road on some of those complicated tax items? Here are some great tax hacks for small businesses. Pay Attention to the Tax Calendar One of the easiest ways to save money on your taxes as a small business is to make sure you don’t miss any tax deadlines throughout the year. Often, missing a deadline results in penalties and extra fees, which take money out of your business or your pockets. Mark important dates on a physical or electronic calendar, and set up automatic payments if you can. Start Planning For Retirement Have you set your retirement goals? If you haven’t you should. If you invest more into your retirement today, you can often end up with larger tax benefits. Make the most of your expenses by looking into the benefits of upping your retirement savings this year. If You Can, Go for the Home Office Deduction The home office deduction is a tricky one. But that doesn’t mean it isn’t worth looking into. If you have a home office, whether it looks like a professional office or it’s a modified closet, you can take this deduction if you use that space solely for your business. That means the kitchen table, family laptop setup will not be eligible. But if you have electronics or office furniture that you use for the sole purpose of doing work for your business, it is included in the deduction. There is a new, easier caveat to the home office deduction: rather than figuring out a percentage of your expenses to deduct based on the home space you use for your business, you can simply multiply the square footage of your office (up to 350 feet) by $5, and just deduct that dollar amount. Do Some Good Research on Deductions and Tax Credits There are always ways to optimize your business to secure refunds, or at least to avoid owing taxes after filing. Whether you want to take a deep dive into the IRS tax code or you want to invite your favorite tax professional to lunch, …