Dear Fellow Taxpayers,
As we begin the New Year, that means it is time to do the taxes. Here is a brief synopsis of what I know:
On December 23rd, the IRS announced a delay in the reporting requirement of third party settlement organizations. Some may have already been prepared to report though, so don't count it out.
Last year’s covid relief enhancements have expired, and some credits return to 2019 levels:
1. $3,000 ($6,000 for 2 or more qualifying persons)
2. Total Expenses
3. Earned Income of taxpayer or spouse.
Note that summer day camp costs, and before & after school care programs qualify for
the Dependent Care Credit, but the cost of summer school, tutoring, and overnight
camps do not.
Self-Only Family Coverage
Minimum Allowable Deductible $1,500 $3,000
Max Out of Pocket Expenses $7,500 $15,000
HSA Contributions are deductible. The annual cap for those contributions is $3,850 for self-only coverage and $7,750 for family coverage. People born before 1969 can put in an additional $1,000. Earnings build up tax free, and they don’t have a use-it-or-loose-it rule.
As promised, here are the details.
1. Qualified improvements include energy efficient insulation, exterior windows, skylights
and exterior doors that meet various energy standard requirements. The new law removes
2. In general, the credit is limited to $1200 per year, with the following exceptions. A higher
limit of $2K is allowed for heat pumps, heat pump water heaters, biomass stoves and boilers.
The credit for windows is limited to $600, exterior doors $250 per year for one door, with a
$500 cap on all exterior doors. The credit for energy audits is limited to $150 per year.
Interest Rates for both the IRS and MA DOR have increased on overdue taxes. However, they have also increased for overdue refunds.
One other item I would like to bring to your attention. The cost of paper has risen astronomically! In an effort to keep your cost and mine down, would you consider receiving a copy of your tax return electronically? You could bring in a thumb drive, and I can download a pdf copy of your return. You will then have a convenient way to transmit documentation to other institutions as needed, without having to make photo copies or scanning pages to make your own pdf copy. Also, the storage of your returns is in one convenient place, we can add each year’s pdf copy to the same thumb drive. No more bulky folders to store, especially when you never look at them again! This is not a requirement, just a request. I will still provide a printed copy if preferred.
As the days get longer, I hope this letter has found you well! I look forward to seeing you all in the coming months!