BECKLEY, WV (WVNS) — It’s the time of year when many say “good-bye” to Saint Nick and Americans say “hello” to Uncle Sam.
Although the Internal Revenue Service will not accept returns until late January, Beckley tax expert Cherie Peacock said on December 30, 2022, that when gathering W-2s, 1099s, mortgage and property taxes and investments, earlier is better.
Peacock warned that this year, the IRS requires third-party network payers like PayPal and Venmo to issue 1099 forms for anyone who paid more than $600 for goods or services.
A mistake could mean higher taxes.
“It’s important when you do get that, if it is not actually business income, that you contact that company as soon as possible to get that amended,” advised Peacock, who is Chief Financial Officer of American Tax Company on South Eisenhower Drive. “Because that should only reflect actual income. So if your best friend sends you $200 for Christmas, you don’t want that included in that 1099.”
Peacock said this year, income tax refunds will likely be less than the past two years when there were special breaks for Covid.
“The child tax credit, the earned income tax credit and the child independent care tax credits are all decreasing,” she said. “In addition, for those who do not itemize, you’ll no longer be able to claim your charitable contributions or donations you’ve done.”
Peacock said a tax expert can offer help on itemizing and tax breaks– particularly for business owners, contractors, DoorDashers and the self-employed. She said those who have no children and only one W-2 may not need a tax expert. For business owners, the self-employed and those with children, she said, a tax expert can help itemize deductions and find tax breaks, which results in a larger tax refund.
“You want to start working on itemizing and making sure you’re not missing deductions that we can potentially claim for you, so an expert comes in handy, then,” she explained.