Tax and Accounting professionals, hear up! Aren’t you uninterested in spending numerous hours pouring via textbooks and web searches looking for the most recent tax legal guidelines? After which having to decipher them into easy-to-understand nuggets that work in your shoppers? Enter: Thomson Reuters Tax Season Toolkit. This one-stop-shop may also help make life simpler by offering complete assets so you possibly can keep forward of the sport in at the moment’s ever-changing world of tax and accounting.

Breeze via tax season with ease

It may be fairly overwhelming enthusiastic about navigating your method via all of the potential deductions, exemptions, credit, and different necessary data associated to submitting taxes for people. On this put up, we are going to spotlight 3 of our high assets included in our Tax Season Toolkit: Yr-Finish Tax Planning for people and companies, How APIs may also help rework your apply, and a Case Research detailing how GoSystem Tax RS and GoFileRoom helped a agency.  Breeze via tax season simply with our complete year-end tax season toolkit.

1. Yr-end tax planning

People

What’s new for people for the 2022 tax season?

• Most of the tax advantages associated to the COVID-19 pandemic have expired or reverted to their pre-pandemic ranges.
• Expanded medical insurance subsidies are prolonged via 2025.
• Each the kid tax credit score and the kid and dependent care credit score revert to pre-pandemic ranges.

Submitting standing and dependents

When recommending year-end tax planning methods, evaluation the taxpayer’s anticipated submitting standing this yr and subsequent and the variety of dependents the taxpayer expects to assert annually.

What’s new?

• The next particular person credit have modified: The CTC reverts to $2,000 and the outdated phase-out applies.
• The age of a qualifying little one decreases to below the age of 17
• The kid and dependent care credit score revert to its pre-pandemic quantity.
• The exclusion from earnings for employer-provided dependent care help additionally decreases to pre-pandemic ranges.

Rising and lowering AGI

For people, year-end tax planning generally entails strategies for rising and lowering AGI. Typically, taxpayers will intention to lower AGI to scale back their total tax legal responsibility. However, there are some situations when it is going to make sense for the taxpayer to extend AGI in a selected tax yr.

What’s new?

The contribution quantities and carryover intervals for unused quantities in a well being versatile spending association (well being FSA) and dependent care (DC) FSAs have modified as follows:

• For plan years ending in 2022, the contribution restrict for well being FSAs is $2,850.• The utmost well being FSAs might permit contributors to hold over to 2023 is diminished to $570.
• Carried-over funds should be used within the first 2½ months of 2023.
• The contribution restrict for dependent care FSAs drops again from $10,500 to $5,000 ($2,500 for separate filers).

Schooling

Taxpayers who’re paying or saving for their very own or their dependents’ schooling have a number of alternatives to maximise education-related tax advantages earlier than year-end.

What’s new?

• For tax years 2021-2025, many private and non-private scholar mortgage discharges are excluded from gross earnings.

Companies

What’s new for companies within the 2022 tax season?

Congress handed the Inflation Discount Act of 2022 which extends, via 2024, the credit score for electrical energy produced from sure renewable assets; the vitality credit score; and different energy-related credit (with varied extension dates)

The Act additionally introduces two new company taxes and varied new clear energy-related tax credit. However these won’t go into impact till 2023. The 2 company taxes are: (a) the 15% company different minimal tax on the adjusted monetary assertion earnings of relevant companies (typically known as the “E-book Minimal Tax”) and (b) the 1% excise tax on the repurchase of the company inventory.

Depreciation and expensing

Buying qualifying property and inserting it into service earlier than year-end can lead to a full expensing or bonus depreciation deduction for 2022. Nevertheless, there are various concerns when planning year-end purchases. An necessary one is the potential for elevated tax charges subsequent yr, which can make deferring deductions extra useful.

What’s new?

For 2022, the utmost quantity of part 179 property that may be expensed is $1,080,000. That full quantity is on the market till the qualifying property positioned in service throughout the yr reaches $2,700,000, at which level a phase-out begins.

The 100% bonus depreciation stays in impact till January 1, 2023. At that time, the first-year bonus depreciation deduction decreases as follows:

• 80% for property positioned in service throughout 2023
• 60% for property positioned in service throughout 2024
• 40% for property positioned in service throughout 2025
• 20% for property positioned in service throughout 2026

Enterprise curiosity deductions

The Inner Income Code limits the deduction of enterprise curiosity bills. The deduction restrict on enterprise curiosity doesn’t apply to companies with 3-year common gross receipts of $27 million or much less for 2022 ($29 million or much less for 2023). The limitation additionally doesn’t apply to deductions for curiosity paid by car sellers on carried stock. As well as, some actual property associated companies can choose out of the limitation, in the event that they forego accelerated depreciation. Curiosity that may’t be deducted as a result of limitation is carried ahead indefinitely.

What’s new?

• Two modifications made by the Tax Cuts and Jobs Act grew to become efficient on January 1, 2022. First, companies are required to amortize analysis and growth bills over a five-year interval. Second, the limitation on enterprise internet curiosity deduction is diminished to 30% of earnings earlier than curiosity and taxes (EBIT) as an alternative of earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA).

Follow Aides

Extenders and expiring provisions 2022

Provisions prolonged via December 31, 2024, through the Inflation Discount Act of 2022:

• Credit score for electrical energy produced from sure renewable assets
• Power credit score
• Different energy-related credit (with varied extension dates)

Provisions just lately prolonged via December 31, 2025:

• CARES Act exclusion for employer funds of scholar loans
• Exclusion for canceled mortgage debt
• New Markets Tax Credit score
• Work Alternative Credit score
• Empowerment Zone Tax Incentives
• Employer Credit score for paid household and medical depart

Provisions just lately made everlasting:

• 7.5% ground for the medical expense deduction
• Exclusion of advantages for volunteer firefighters and emergency medical responders
• Enterprise tax extender provisions
• Credit score for sure expenditures for sustaining railroad tracks

2. Three Advantages of APIs

There are vital advantages to be gained when companies have the pliability to attach the dots throughout programs through APIs. The truth is that when knowledge is siloed in separate functions and disconnected programs, or in the event you’re depending on handbook processes to enter and mixture it, your agency is probably going lacking out on alternatives to leverage it between varied instruments and customers. Let’s take a more in-depth look.

1. Drive better efficiencies

• Combine with present enterprise programs to scale back handbook knowledge manipulation and streamline your tax workflows.
• Scale back inner controls dangers that include the handbook add and obtain of knowledge recordsdata.
• Use the identical knowledge throughout a number of options, which means you solely import as soon as — saving you enter time.
• Export knowledge for use by your companions or in-house analytics staff for added evaluation.

2. Bolster your agency’s advisory alternatives

• a current survey from the Thomson Reuters Institute discovered that 95 p.c of tax professionals imagine their shoppers need enterprise advisory providers
• Corporations can then focus extra vitality on delivering shoppers higher-value, higher-margin advisory providers that may improve shopper satisfaction and finally boosting profitability.

3. Differentiate via specialization

• Focusing on a particular area of interest or vertical permits companies to distinguish from the competitors
• Leveraging APIs may also help companies extra effectively meet the distinctive wants of these shoppers.
• Successfully utilizing APIs can reduce prices, drive better efficiencies, and assist enhance the underside line, and the impacts of APIs on agency leads, in addition to tech employees, shouldn’t be missed.

3. The most effective service requires one of the best expertise

• Andersen Tax has a protracted historical past of offering best-in-class providers and session to shoppers, with 950 workers and a number of other worldwide workplaces.
• John Bartlett, supervisor of expertise at Andersen Tax, targeted on discovering methods to make his employees’s jobs simpler and extra environment friendly by using the right instruments for the job.
• GoSystem Tax RS was chosen as a consequence of its means to supply practitioners with entry to data anyplace on the planet at any second whereas sustaining safe software program that may be repeatedly up to date.
• The addition of GoFileRoom mixed with Thomson Reuters’ future-focused growth focus has made a big effect for them by way of elevated profitability and improved processes.
• Thomson Reuters’ future-focused growth focus has made a big impact on Andersen Tax.
• These options have allowed Andersen Tax workers to work remotely with improved effectivity, leading to sooner processing occasions and elevated profitability.

Tax season may be overwhelming and intimidating. Make life simpler and assist you to keep forward of the sport with the Tax Season Toolkit. This one-stop-shop offers an abundance of invaluable assets to information us via monetary planning, taxes, compliance, accounting, and extra. So, regardless of how complicated you assume issues might get this tax season, keep in mind that you’ve received a dependable supply to advise you each step of the way in which. Don’t be left at the hours of darkness – take management of your funds and look out in your finest pursuits with the assistance of the Thomson Reuters Tax Season Toolkit.