For most of us, preparing our taxes is really … well, taxing. The good news is Thomas Spade ’07 (M.S.), instructor of accounting in the Department of Accounting and Business Law, is here to provide expert advice during tax time.
The College Today sat down with Spade to find out what College of Charleston faculty and staff need to know about preparing their 2022 tax returns. Here’s what he had to say.
The main differences are for those with children, specifically, you might not be getting as big of a refund as you did for 2021, or you might owe something. In 2021, the child tax credit was $3,000 for most children under 17, and you could use all of it to generate a refund. But in 2022, it’s back down to $2,000 per child under age 17, and only $1,500 of it can be used to generate a refund. Also, in 2021, you could claim up to $8,000 per child (up to 2 children) for purposes of the credit for child and dependent care, but that’s back down to $3,000 per child (up to 2 children) in 2022.
In 2021, everyone was allowed to deduct something for cash contributions to charities. However, that deduction has gone away in 2022, so only those who claim itemized deductions (as opposed to the standard deduction) can take them.
Something else to consider is that in 2022, you may have received a tax rebate from South Carolina. The rebate was the lesser of your actual tax liability for 2021, or $800. If you filed on time (either by April 18, 2022, or by February 15 2023 with an extension), then you would have been eligible for the rebate. If you didn’t get your rebate, visit https://dor.sc.gov/rebate-2022 to check the status.
Also, for those who are retired military, if you receive military retirement pay in South Carolina, it’s no longer taxable. South Carolina now exempts 100% of military retirement from state income tax.
Hold onto it with the rest of your tax documents. The form is provided pursuant to the Affordable Care Act, as proof that you were offered health insurance. The Federal penalty for failure to carry health insurance was repealed in 2017, but this requirement remains. So retain it with your records. Remember, hold onto your tax returns forever, but you can dispose of the related documentation that you used to prepare the returns after seven years.
Nothing truly specific to higher-ed employees, unfortunately. Most tax breaks for educators that are available are specifically limited to K-12 employees, such as deductions for classroom expenses. However, all South Carolina residents should be aware of a few things:
If this is your first year filing in South Carolina, especially if you moved to Charleston from out of state, you should seek professional assistance. South Carolina gives multiple options for reporting in your first year of residence, but the related calculations are not simple. If you have a small business on the side, you should seek the help of an expert. There is unfortunately a lot of incorrect tax related information on the internet, especially regarding what is and what is not deductible, and the courts have ruled that you can’t rely on the internet for purposes of avoiding tax penalties. If you are at all unsure about your situation, the cost of seeking a competent tax professional is more than worth it, to keep you from having to deal with unnecessary problems later!
Spade is a shareholder/CPA with Thomas M. Spade, CPA, P.C. in Mt. Pleasant and a frequently interviewed tax expert on local news outlets.
