2022 Tax Planning Guide

 In Articles

November 18, 2022 |

As we reflect on a year of inflation, rising interest rates, low unemployment rates, and global conflicts, 2022 has certainly been a year of adapting and evolving to ever-changing economic conditions. The one constant is Simon Lever’s commitment to providing personalized advice when it matters most, helping you navigate changes and reach your business goals.

Whether you are working with Simon Lever for individual or business tax preparation, this year’s tax planning guide will highlight opportunities, strategies, and considerations to optimize your tax position.

This information should be used as a reference guide — to remind and prompt questions of your Simon Lever advisor. It is not a substitute for direct conversations and the personal service you expect from Simon Lever.

Thank you for trusting us to serve you and aid you in creating a financial advantage. Our purpose remains unchanged — to maximize your success by delivering expert financial and business advice every step of the way.

Important 2022 Tax Filing Deadlines

Tax Filing Type Deadline (for Calendar Year Entities)
  • Partnerships (Form 1065)
  • S Corporations (Form 1120S)
March 15, 2023
  • Individuals (Form 1040)
  • C Corporations (Form 1120)
  • Foreign Bank & Financial Reporting (FBAR)
    (FinCEN Report 114)
  • Trusts & Estates (Form 1041)
April 18, 2023
  • Tax-Exempt Nonprofit Organizations
    (Form 990)
May 15, 2023
  • Extended return filing for Partnerships
    (Form 1065 & S Corporations Form 1120S)
September 15, 2023
  • Extended return filing for Trusts & Estates
    (Form 1041)
October 2, 2023
  • Extended return filing for Individuals
    (Form 1040)
  • Extended return filing for C Corporations
    (Form 1120)
  • Extended return filing for Foreign Bank & Financial Reporting (FBAR)
    (FinCEN Report 114)
October 16, 2023
  • Extended return filing for Tax-Exempt Nonprofit Organizations (Form 990)
November 15, 2023

Tax Strategies & Opportunities

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Tax Strategies & Opportunities for Individuals


As the year comes to a close, take some time to review your investments and determine which strategies will help you meet your financial goals. Here are a few considerations as you prepare for the year-end:

  • Consider capital losses to offset future capital gains.
    • Take the time to review your investment portfolio and consider whether selling losers to offset gains may be an appropriate strategy for you. Capital losses can offset capital gains plus up to $3,000 of other income. And there is no time limit on applying excess capital losses. They may be carried forward to offset future capital gains.
  • Be aware of the wash-sale rule.
    • The wash-sale rule indicates that the IRS will not allow a tax loss to be applied if you purchase substantially identical securities within 30 days of a sale. Keep this in mind as you plan your strategies.
  • Consider gifting non-cash assets.
    • Giving of non-cash assets can yield significant tax benefits. If you have appreciated stock (or mutual fund shares) that you have held more than a year and you plan to make significant charitable contributions before year-end, consider keeping your cash and donating the stock instead. You will avoid paying tax on the appreciation but will still be able to deduct the donated property’s full value. However, if the stock is now worth less than when you acquired it, sell the stock, take the loss, and then give the cash to charity.

Virtual Currency & Digital Assets

The complexity and variety in the virtual currency and digital asset environment continues to evolve. Due to this evolution, we recommend consulting with your Simon Lever advisor to determine the tax impact and reporting requirements if you are participating in either virtual currency or digital asset transactions.

As you prepare to consult with your advisor, here are some considerations to keep in mind:

  • If you bought, sold, received, or exchanged any financial interest in a virtual currency or digital asset during the year, you may have a tax reporting requirement.
  • Virtual currency and digital assets are treated as property and are taxed at ordinary or capital gain tax rates depending on the character of the transaction.
  • The wash-sale rule mentioned above do not currently apply to virtual currency and digital assets.

Retirement Plan & Health Savings Account (HSA) Contributions

Now is the perfect time to review your retirement and health savings account contributions and adjust as needed. Consider the following as you plan:

  • Know the maximum retirement contributions you are able to make:
    • Individuals can contribute up to $20,500 to a 401(k), plus $6,500 if age 50 or up, until December 31, 2022.
    • Individuals can contribute up to $6,000 to an IRA, plus $1,000 if age 50 or up, until April 18, 2023.
    • Contact your Simon Lever advisor for additional retirement plan strategies, including Roth IRA contributions and conversions.
  • Maximize your health savings account contributions:
    • If you are enrolled in a high-deductible health plan, you may be eligible to make tax-deductible contributions to an HSA of up to $7,300 for family coverage or $3,650 for individual coverage. An additional $1,000 is permitted if you are 55 or older by the end of the year.

Itemized Deductions

Did you know that itemizing deductions can provide additional tax benefits?

  • The IRS provides a standard deduction of $25,900 (married filing jointly) or $12,950 (single). However, if you itemize your deductions, you have increased flexibility in managing your income. Itemized deductions include:
    • State and local taxes up to the $10,000 cap.
    • Home mortgage interest.
    • Charitable contributions.
      • Consider a strategy of bunching your charitable contributions into one year to get a larger itemized deduction. This strategy works well when combined with a donor-advised fund.

Contact your Simon Lever advisor for more information on how to maximize your charitable contributions and itemized deductions.


Education funding continues to be a focus, and there are key tactics to consider as you plan for education costs.

  • 529 plans have multiple benefits to consider as you plan for education funding.
    • The use of 529 plans is a common way to help fund not only college costs, but also K–12 education expenses and qualified college loan debt. The amount used to offset qualified college loan debt is limited to a lifetime maximum of $10,000.
    • While contributions to 529 plans are not tax-deductible for federal income tax purposes, earnings grow tax-free and — if used to pay for the beneficiary’s college expenses — are never taxed.
    • Contributions to a 529 plan are deductible for Pennsylvania tax purposes, resulting in a 3.07% tax deduction. Maximum PA tax-deductible contributions permitted to 529 plans equal $16,000 per individual for 2022, per beneficiary.
  • Student loan forgiveness and payment relief continues to be an important topic. As of the date of this post, the federal student loan forgiveness program announced in August 2022 is being challenged in the federal court system and is currently on hold. Take note of the following updates for relief and forgiveness limits as originally presented by President Biden:
    • Federal student loan payment relief was extended through 2022. In 2023, monthly payment and interest accrual on federal student loans will resume 60 days after the court challenges are settled or 60 days after June 30 if the litigation is still ongoing.
    • In August 2022, President Biden announced non-taxable student loan debt forgiveness of up to $10,000 ($20,000 for Pell Grant recipients) for borrowers earning less than $125,000 per year. As noted above, this forgiveness is being challenged and is currently on hold (as of November 21, 2022).
    • Pennsylvania confirmed that it will follow federal guidance and will not tax student loan relief.

Tax Strategies & Opportunities for Businesses

As the year wraps up, we recommend connecting with your advisor to ensure you are taking steps to maximize your benefit. Here are a few items to review for your business and discuss with your advisor.

Equipment & Asset Purchases

If you have, or are considering the purchase of, equipment and assets for your business, take the following strategies and updates into consideration. We recommend consulting your advisor on the best strategies for purchases for your business.

  • Current tax law provides the option to deduct 100% of the cost of equipment in the year of acquisition (this will be reduced to 80% next year). There is no dollar limit to this deduction (some restrictions apply).
  • Businesses can consider accelerating purchases planned for the first quarter of 2023 into the 2022 calendar year to accelerate tax deductions.
    • Be aware that there are certain limitations on vehicles related to depreciation.
    • To be eligible for depreciation, assets must be received and available for use, not just ordered.

Qualified Improvement Property

If you completed commercial property improvements, be sure to review them with your advisor to determine potential tax benefits.

  • Eligible interior renovations to a commercial property may qualify for a 15-year depreciable life or bonus depreciation (immediate write-off) in 2022 (80% starting next year).
  • Excludes elevators, escalators, building enlargement, and building interior structural improvements.

Prepaying Expenses

Consider using prepaid accounts for eligible expenses.

  • Certain expenses are eligible for a tax deduction when prepaid in the current year with the benefit of the expense occurring in the following year.
    • Some eligible expenses include insurance, property taxes, and supplies.

Damaged and/or Obsolete Items

Don’t forget to evaluate inventory and identify damaged and/or obsolete items.

  • The carrying cost of any such items of inventory may be written down to the lesser of their probable selling price (net of selling expenses) or cost.

Cash Basis of Accounting

Consider your accounting method and if a change would benefit your business.

  • Under the cash basis of accounting, income and expenses are reported only when cash is received or disbursed. Making the change from accrual basis to cash basis can result in a significant one-time deferral of income.
    • Not all businesses are eligible to report on the cash basis.

Cost Segregation for Real Property

Owners of real estate can gain tremendous tax benefits by using a popular asset-depreciation technique called cost segregation. Using this method, a real estate holding can be determined to consist not only of land and buildings but also tangible personal property and land improvements.

  • Tax savings can come from accelerated depreciation deductions available to personal property and land improvements.
  • Care must be taken to adequately document (typically performed by an engineer or cost segregation study specialist) the portion of the building that qualifies for accelerated depreciation.
  • Consult with your advisor to understand if this would be of benefit to you.

Meals & Entertainment Expenses

Take the time to review expensed meals. Tax deductions could be available depending on the type and purpose of the expense.

  • Through December 31, 2022, business meal purchases from restaurants are 100% deductible.
  • Meals offered at company-wide events, such as picnics or holiday parties, are 100% deductible.
  • Most other business meals are 50% deductible for tax purposes.
  • Entertainment continues to be non-deductible.

Capitalization of Research & Development Expenditures

Research and development costs will be handled differently in 2022. Plan accordingly and consult your tax advisor for ongoing updates.

  • Beginning January 1, 2022, businesses must capitalize and amortize (expense over several years) all research and development expenditures for tax purposes. This is a significant change from last year, and there is hope that Congress will repeal this requirement retroactive to January 1, 2022, in late December or early January.
    • This includes software development expenses.
  • The amortizable life (write-off period) is generally 5 years for expenses from US-based research and 15 years for offshore research.

Business Interest Expense Limitations

2022 changes to the limitation calculation could significantly impact businesses.

  • Businesses with average gross receipts greater than $27 million are subject to limitations on the deductibility of business interest expense.
  • The $27 million threshold is reviewed in aggregation when there are additional businesses under common control.
  • Starting in 2022, businesses are no longer able to add back depreciation and amortization to the taxable income threshold used in the limitation calculation. This could significantly impact businesses with interest expense and larger depreciation or amortization deductions.
  • If the business interest is disallowed, it is carried forward to future years in which the business has excess taxable income.

Employer Retention Tax Credit

Your business may still amend payroll tax returns if you qualify. 

  • Though the program ended in September 2021, qualifying employers have 3 years from the filing of payroll tax returns to amend for the Employer Retention Tax Credit (ERTC).
  • ERTC provides a refundable payroll credit for employers who had to close or suspend operations and/or experienced a significant decline in gross receipts during the pandemic.
  • For those who qualify, the credit is for 70% of up to $10,000 of wages per qualifying employee per payroll quarter for 2021 (for 2020 the credit is limited to 50% of up to $10,000 wages per qualifying employee per year).
  • Credits received do impact the calculation of taxable income.



Please contact your Simon Lever trusted advisor for more details about how the above information may impact you.

Disclaimer: Information provided by Simon Lever as part of this blog post is intended for reference only. This information is not a substitute for seeking professional advice from a Simon Lever advisor. Although Simon Lever has made every effort to ensure that the information provided is accurate, the reader assumes all responsibility for the use of this information.

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