Considering an Electric Vehicle?

To see if a vehicle itself qualifies for the Electric Vehicle Tax Credit, you can visit this Fueleconomy.gov tool. Note that there are additional rules that come into play:

  • The cost of the vehicle can’t exceed $80,000 for vans, SUVs, and trucks. Other vehicles can’t exceed $55,000.
  • You only qualify for the credit if your income is less than $300,000 for married filing jointly, $225,000 for head of household, or $150,000 for all other filers

See the IRS page Credits for New Clean Vehicles Purchased in 2023 or After or contact us for more information.

Highlights from the Inflation Reduction Act

Here are some highlights from the Inflation Reduction Act that was signed into law on August 16th:

  1. The cost of Marketplace health insurance remains capped for everyone. You only have to pay at most 8.5% of your income or the total cost of the premiums, whichever is lower. This was extended through 2025.
  2. The 2021 Energy-efficient Home Improvement Credit was extended through 2022. The lifetime limit is $500.
  3. The Energy-efficient Home Improvement Credit was expanded for 2023 and going forward. The credit resets annually (as opposed to a lifetime limit) and has a $1200 limit.
  4. Solar, geothermal, wind, biomass fuel, and fuel cell tax credits will go back up to 30% until 2032. The percentage had been slowly decreasing.
  5. The Qualified Plug-in Electric Drive Motor Vehicle Credit is now the Clean Vehicle Credit. If you signed a contract/purchased a vehicle before August 16, 2022, the old rules apply. If you sign into a contract for a car after this date, there are more restrictions on who/what qualifies:
    • The vehicle needs to have final assembly in North America starting August 16, 2022. The manufacturer will have this info.
    • Starting in 2023, there are limits on where the battery components can come from and still qualify. Starting in 2024, critical minerals of the battery have limits on where they can come from as well. The car manufacturer will have to provide this information to the buyer.
    • There are income limits to who can claim the credit. Your adjusted gross income (AGI) must be below $300,000 for married people, $225,000 for head of household filers, and $150,000 for single tax payers. This starts in 2023.
    • Car makers that were previously phased out of the credit due to number of sales will have their vehicles eligible for the credit again if they meet the requirements listed in the first two bullet points.
    • Used electric vehicles can potentially qualify for a smaller version of credit.

See this article for more information: Inflation Reduction Act and Taxes | Kiplinger or feel free to contact us.

Wisconsin Help for Homeowners

Wisconsin Help for Homeowners is a program that was just released. You may qualify to receive some funds from the state if you meet all of the following:

  1. You are a Wisconsin homeowner living in a:
    1. Single family home
    2. Duplex
    3. Condo
    4. Factory-built home
  2. You have been financially impacted since January 21, 2020
  3. Your household income is at or below 100% of the county median. Check your income here

For more information and to find out how to apply, visit the Wisconsin Help for Homeowners information page.

2022 Tax Season Safety Measures & Tax Prep Options

In order to keep our staff and clients healthy, you will be required to wear a mask when you enter the building. We will have some on hand if you do not have one.

Appointments are not necessary to get your tax return prepared. If you don’t want to make an appointment, you can:

If you like using our datasheet, you can go to our Prepare My Taxes page to enter in your information and send it to us electronically or else you can print that page out to get the familiar datasheet and write it in yourself.

Save Your Child Tax Credit Letters from the IRS!

The IRS will be sending out Letter 6419 in January of 2022 to let taxpayers know how much advance payments they received for the child tax credit. Please keep this letter with your tax records and bring it in during tax time so we can report this on the tax return. If you do not have this letter, the amount reported on the tax return may not be correct, which can result in: delayed processing of the return, lower refunds received, or more to pay in to the IRS.

401k and Simple IRA increases for 2022

The limits for 401(k), 403(b), and most 457 plans will increase to $20,500 for 2022. The catch up limit for people aged 50 and over is at $6500; the total contribution can be up to $27,000. Here is the IRS release with more details: IRS announces 401(k) limit increases to $20,500

The limits for a Simple IRA contribution will increase to $14,000 for 2022. The catch up limit for people aged 50 and over is $3000; the total contribution that can be made is up $17,000. Here is the updated IRS page with more details: Retirement Topics – SIMPLE IRA Contribution Limits