While Congress didn’t pass the Build Back Better Act in 2021, there are still tax changes that may affect your tax situation for this year. That’s because some tax figures are adjusted annually for inflation.
If you’re like most people, you’re probably more concerned about your 2021 tax bill right now than you are about your 2022 tax situation. That’s understandable because your 2021 individual tax return is generally due to be filed by April 18 (unless you file an extension).
It’s a new year with new opportunities for your not-for-profit to boost its financial resilience. Although COVID-19 continues to make forecasting difficult, your staff and your board’s finance committee can take steps to negotiate obstacles. Here are three.
After two years of no increases, the optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2022 by 2.5 cents per mile. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 58.5 cents (up from 56 cents for 2021).
You may pay out a bundle in out-of-pocket medical costs each year. But can you deduct them on your tax return? It’s possible but not easy. Medical expenses can be claimed as a deduction only to the extent your unreimbursed costs exceed 7.5% of your adjusted gross income. Plus, medical expenses are deductible only if you itemize, which means that your itemized deductions must exceed your standard deduction.
Social media is an essential tool for not-for-profit outreach, engagement and fundraising. But social media also poses a reputational threat if your organization doesn’t clearly communicate rules for its use and prepare for “emergencies.” If you haven’t already, it’s time to implement some best practices.
Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2022. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.
If you’re paying back college loans for yourself or your children, you may wonder if you can deduct the interest you pay on the loans. The answer is yes, subject to certain limits. The maximum amount of student loan interest you can deduct each year is $2,500. Unfortunately, the deduction is phased out if your adjusted gross income (AGI) exceeds certain levels, and as explained below, the levels aren’t very high.
During the initial COVID-19 outbreak, a small community group decided to organize grocery deliveries to low-income seniors. Time was of the essence and participants in the fledgling project didn’t have time to file for 501(c)(3) status or build fiscal infrastructure. Fortunately an established nonprofit agreed to act as a fiscal sponsor — providing a legal and financial umbrella to the project.
Year-end is a good time to plan to save taxes by carefully structuring your capital gains and losses.
Consider some possibilities if you have losses on certain investments to date. For example, suppose you lost money this year on some stock and have other stock that has appreciated. Consider selling appreciated assets before December 31 (if you think their value has peaked) and offsetting gains with losses.
Budgeting, like many other things, was generally easier before COVID-19. Even though the pandemic isn’t over and much remains uncertain, not-for-profits need to plan their financial needs and project financial resources. But you might be able to make the budgeting process more effective by trying a new approach — for example, a rolling budget — or by reforecasting an existing budget.