SOMA Living February 2023

TAX UPDATE

DEPENDENT/CHILD TAX CREDITS FOR 2022

We are excited to announce the merger of the CPA firms of Couto DeFranco, CPAs and Marco DeLuca, CPA.

Every year we go through tax law changes that affect our taxes one way or another. This year is no exception. One area of change that may work in your favor is the child tax credit. In 2021, the IRS made advance payments to you for each of your qualifying children, but you had to reduce the credit on your tax return. If you received an advance payment of $1,500 for your 10 year old, the credit on your 2021 tax return went from $3,000 to $1,500. As there were no advance payments in 2022, and despite the credit being reduced to $2,000 per qualifying child, you may have an additional $500 added to your refund this year. However, if you have qualifying children under the age of 13 and paid for their care while you were at work, you may well experience a reduction to your refund. The maximum credit now drops from $4,000 (in 2021 -per child up to two children) to a maximum credit of $1,050 for each child for 2022. You may also benefit from increases to areas including the standard deduction, teacher expense deduction, standard milage rates and inflation adjusted income tax brackets for ordinary and long term capital gains. There are many more tax law changes for 2022. If you want more information, or you wish to hire a licensed tax preparer, please contact our firm so we may assist you.

Nelson Couto, CPA, CFP ® and Anthony DeFranco, CPA, CFP ® , MS (Taxation) — Partners; Couto DeFranco, P.A.

Marco DeLuca, CPA

Offices in West Orange & Maplewood

Couto DeFranco and Marco DeLuca For 30 years, we approach every client with a commitment to excellence, innovation, and integrity. www.accountants–nj.com

FEBRUARY 2023 | SOMA LIVING 27

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