A BALLAD OF A GREAT TAX SEASON
2022 tax letter
Ladies and Gentlemen, start your engines. Tax season is here!!!
As another year has raced by, Cowan, Epperson & Associates has accelerated into another tax theme. Let me introduce you to the cast of TAX A DAGA NIGHTS The Ballad of a Great Tax Season. Staring Katie Conklin, she is young and energetic (just like the rest of us) and will be celebrating her 3rd lap (years) with the firm in May of this year. Joe Baptist, our resident tax law reader just eclipsed his 5th lap with the firm in December. In January Storm Wolff our resident workout queen made it around the CEA track 23 times. Jaylene Epperson resident shopper has 10 trips around the track. Some of you will remember Audrey Mock. She has graciously agreed to help us during tax season part-time. Plus, we have a newbie, Maddie Tabit.
CEA continues to grow and progress with technology year by year. Our portal and website have great tools that can be accessed by everyone. This year we are adding another tool. The ability to sign your e-file forms and tax engagement letters electronically. I anticipate this will be a great tool for our snowbirds and for many of our clients that live outside of Illinois on a permanent basis. Not everyone will welcome this, and I get it. Keep in mind this feature is OPTIONAL.
Everyone here at CEA has been adding fuel to our brain tanks year-round to prepare for this tax season. This brain fuel consists of Tax Court Cases, IRS (Internal Revenue Service) Notices, Treasury Regulations, IRS publications and several new tax bills that have passed in 2022. Some of you may recognize a few of these:
Inflation Reduction Act
Employer Retention Credit
SECURE ACT 2.0
Illinois has new laws each year too. None more impactful than the pass-through-entity credit for businesses. This makes estimated tax payments particularly challenging as this credit flows through to your individual tax return.
This information takes time to collate, sort, organize and then to decipher it in a meaningful way to pass it on to you. That is why our checklist and organizer that we provide to you is such an invaluable tool. We are trying to get you every deduction and every tax credit you are entitled to!!!
We work hard to be proactive by looking ahead multiple years on your behalf, but life happens, and a speed bump may pop up along the way. We are here year-round so do not hesitate to email or call us anytime.
Typically, there is a lot of consistency from one tax year to another. However, Congress has lowered many tax credits back to 2020 levels and everyone is well-aware of how the stock market has performed this year. Some of you will receive a 1099-K reporting money you received. Please provide us with this form and an explanation of the proceeds received. This may be a taxable transaction, but we need to know the specifics to determine if you may have expenses that are attributable to this income.
Lastly, I want to highlight a few points that apply to 2023:
Bonus depreciation drops to 80% next tax year. In rare circumstances your business may be impacted.
Solar and energy credits have increased to 30% (we have more information on our website).
Electric vehicles credit has increased back to $7,500 however there are other income and cost limits that might reduce or even eliminate the credit.
Write-off for meals has decreased to 50%.
In case you were wondering I have been around the track for 31 laps - SHAKE AND BAKE
Don’t forget to bring all supporting documents, including W-2, real estate tax bills, voided check, ESTIMATED TAX PAYMENTS and 1099’s just to name a few, to your tax preparation appointment or upload the documents to our portal. If you prefer you may drop off your information during normal business hours, or in our 24-Hour DROPBOX.
See you at the finish line!!!
Darren