4 tax moves to make in January 2022

Happy new year 2022

I know I said this last year, but once again, I have never been so ready for a fresh start!

The last two years were full of chaos, COVID-19 and otherwise, that affected every part of our lives, taxes included.

So, recoveries from a New Year's Eve of hearty partying notwithstanding, let's get right to 2022 taxes!

April Tax Day, but not the 15th: This year, the Internal Revenue Service is aiming to get back on a more normal cycle. Tax Day 2022 is in April.

OK, it's on Monday the 18th instead of the 15th, but still.

The three-day shift is because the standard April 15 filing deadline falls on Emancipation Day. When this Washington, D.C., holiday, which celebrates the abolition of slavery in the District of Columbia before the issuance of the Emancipation Proclamation, falls on the day our federal taxes are due, Tax Day is bumped to the next business day. In 2022, that's Monday, April 18.

But I'm already getting ahead of myself. (Told you I was ready to get started!) Back to January and some tax moves to make as we head out into a shiny new tax year.

1. Pay your estimated taxes. Yes, we're at the very beginning of 2022, but millions of filers (including me!) still have to close out 2021 taxes. We pay estimated taxes, and that final amount for last year is due on Jan. 18.

These found amounts are due on earnings that aren't subject to payroll withholding. This includes such things as investment income, prize money, and earnings from gig jobs.

As noted, the final 2021 estimated tax payment is due on Tuesday, Jan. 18. It's a couple of days late this year because the 15th this month is Saturday, and the next business day is Dr. Martin Luther King's federal Monday holiday.

The table below shows the dates the IRS expects these four extra payments when weekends and federal holidays aren't involved.

Payment

Due Date*

For income received in

1

April 15

Jan. 1 through March 31

2

June 15

April 1 through May 31

3

Sept. 15

June 1 through Aug. 31

4

Jan. 15 of next year

Sept. 1 through Dec. 31

*If the 15th is on a weekend or federal holiday, the estimated payment is due the next business day.

You can make this final payment (and others) electronically or, if you choose the snail mail route, by submitting the appropriate 1040-ES voucher, which includes mailing addresses in the instructions.

And you can skip this final payment if you're sure you'll get your 2021 tax return filed and will pay any due taxes by Jan. 31.

Good intentions don't count here. If you miss the January estimated tax payment and then don't file your annual return by the end of the month, Uncle Sam will hit you with penalties for not paying your estimated taxes on time.

2. Double check your deadlines. While millions of us will be dealing with the January estimated tax due date, some folks get a bit more time to meet this deadline.

Unfortunately, the reason these filers get a deadline delay is not a welcome one. They endured major natural disasters. And the IRS gave them more time to meet a variety of tax obligations, including making estimated tax payments.

Certain residents of Louisiana, Mississippi, Pennsylvania, New York, New Jersey, and Connecticut were in Hurricane Ida's path. The IRS is giving them until Feb. 15 to fulfill a variety of tax tasks, including making estimated tax payments. Certain filers in Alabama get even longer, until Feb. 28. And May 16 is the due date for some Kentucky, Illinois and Tennessee tornado victims.

Of course, if you are able to file earlier than your extended deadline, the IRS will gladly accept the paperwork and accompanying tax payments. If you have more time, you can use this month to figure out the forms and how you'll pay when your deadline arrives.

   One group of taxpayers has an earlier, not later, January deadline. Some Californians who were affected by wildfires are facing a Jan. 3 deadline.

   This deadline, however, is not for 2021 taxes, but for already delayed 2020 tax tasks, both for individual and business taxpayers.

   If you're a Golden State resident of Lassen, Nevada, Placer, Plumas, Tehama and Trinity counties, check out the IRS specifics on which deadlines and payments are affected so you don't miss this on-the-doorstep due date.

 

3. Find professional tax help. If trying to keep track of (and meeting) changing deadlines, understanding new tax laws (especially those created during the COVID-19 pandemic), and filling out the myriad IRS forms keeps you up at night, then perhaps it's time to hire a tax pro.

January is the best month to do that. Although many tax professionals still are dealing with 2021 (and some 2020) tax matters for their existing clients, they are more likely to take on new customers at the start of a tax season.

And let's be honest. Unless your financial and tax situation is very basic, you'll likely need some help sorting out whether a particular tax break applies. And with all the COVID upheaval to our tax (and personal) lives and the Internal Revenue Code over the last couple of years, few of us live in a basic, simple tax world.

So consider getting professional tax help. And do so soon.

As I mentioned, most tax pros are still working on cleaning up their existing clients' tax situations and getting ready to start on their 2021 returns. You want to be part of that group before the Certified Public Accountant, Enrolled Agent or other tax pro of your choosing — the IRS has an online credential tax preparer search tool — fills up her or his schedule.

Once you do find a tax pro that fits your filing needs, then check out that person before finalizing your tax-help partnership.

4. Know your Child Tax Credit situation: One area where a tax preparer can help is making sure you get your enhanced 2021 Child Tax Credit (CTC).

This tax break for the 2021 tax year only (so far) is $300 for youngsters who are age 5 or younger or $250 per kiddo ages 6 to 17. That comes to a total of $3,600 per each younger child and $3,000 for the older ones.

Last year, millions of families got half of this benefit early as Advance Child Tax Credit (AdvCTC) monthly payments. Now they need to file to get the rest of the credit amount for their qualifying children.

And parents who didn't get any early CTC amounts last year definitely need to claim their eligible amounts on their 2021 returns.

If you did get AdvCTC money last year, be on the lookout for official IRS notification Letter 6419. This snail-mailed document will include the total amount of advance payments sent you in 2021. It will help you calculate the remainder you're due when you file your taxes this year.

Hang on to it so it's handy when your file your return. Or take it with you when you meet with your tax preparer, as noted in January tax move #3.

More January tax moves: Alright, alright, alright. You'll jazzed and ready to deal with your taxes this year, right? Sure you are!

via GIPHY

If fact, you want even more that these four January 2022 tax moves. That's why the ol' blog's standing monthly feature over in the righthand column gets the first Saturday Shout Out of 2022.

You'll find these additional tax moves to take care of this first month of the brand-spanking-new tax year under the countdown clock already clicking away to Tax Day 2022.

Wait, you say, it's a holiday, and you want to wait a bit longer to fully recover from last night's Welcome 2022 festivities. That's fine.

But when you do feel up to it, check out the January Tax Moves. They can help get your 2022 tax season off to a good start.

 

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4 tax moves to make in January 2022