J.K. Lasser's 1001 Deductions and Tax Breaks 2022, 2nd Edition

Introduction

The COVID‐19 pandemic triggered a number of changes in tax rules designed to help individuals cope financially with the economic fallout in the economy. Some changes are temporary, while others are permanent. The word “taxes” makes most people groan. There are good reasons for this response: First of all, the cost of paying your taxes annually can be a financial burden. You may feel taken to the cleaners every time you view your paycheck after withholding for federal income taxes (not to mention state income taxes as well as Social Security and Medicare taxes). And taxes are time consuming—to gather information, meet with a tax professional if you use one, or prepare and submit your own returns.

Second, it can cost you money to get your taxes done. The IRS says that nearly 60% of taxpayers use paid preparers for their returns. Of course, because more than 90% of individual income tax returns are completed by computer (through a paid preparer, with software, or FreeFile), the places where deductions and credits are entered on the return is not critical to you; it's effectively done automatically.

Third, the tax law is very complicated and changing all the time. There have been several major tax acts impacting 2021 returns. These include the Consolidated Appropriations Act, 2021, and the American Rescue Plan Act.

Fourth, you have to know what the tax rules are and can't claim ignorance to avoid taxes and penalties. Even if you use a tax professional or tax preparation ...