WHAT'S NEW FOR 2023

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SECURITY REMINDERS FOR TAXPAYERS

Again, we are warning taxpayers to learn to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as your bank, credit card company and government organizations, including the IRS. Do not click on links or download attachments from unknown or suspicious emails. Also, hang up the phone if someone is claiming to be the IRS.The IRS does not call taxpayers.

REMINDER - Some refunds will be held until Mid - February

Taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit may experience a refund hold. According to the Protecting Americans from Tax Hikes (Path) Act, the IRS cannot issue these refunds before mid-February.

EDUCATIONAL TAX CREDITS

College credits - Please remember to bring your 1098-T statement with you along with any receipts for books, course materials and required equipment for this year’s tax filing, it will save you time and money. The 1098-T can also be found online in your student’s college account.

2023 TAX BRACKETS

  • 10% for incomes of $11,000 or less (less than $22,000 for joint filers)
  • 12% for incomes over $11,000 ($22,000 for joint filers)
  • 22% for incomes over $44,725 ($89,450 for joint filers)
  • 24% for incomes over $95,375 ($190,750 for joint filers)
  • 32% for incomes over $182,100 ($364,200 joint filers)
  • 35% for incomes over $231,250 ($462,500 for joint filers)
  • 37% for incomes over $578,125 ($693,750 for joint filers)

LONG TERM CAPITAL GAINS TAX

0% for incomes of $44,625 or less ($89,250 or less for joint filers)
15% for incomes over $44,625 ($89,250 for joint filers)
20% for incomes over $492,300 ($553,850 for joint filers)

  • The 3.8% surtax on net investment income stays the same for 2023. It kicks in for single people with modified AGI over $200,000 and for joint filers with modified AGI over $250,000

DEPENDENT CARE CREDIT

The maximum expense claim is $3,000 for one person, or $6,000 for two or more people. The percentage of your qualified expenses you can claim ranges from 20% to 35%.

REQUIRED MINIMUM DISTRIBUTIONS

RMD’s are required to be taken at age 73.

RETIREMENT CONTRIBUTION LIMITS

401k - $22,500 (Extra $7,500 age 50+)
IRA - $6,500 (Extra $1,000 age 50+)
HSA - $3,850 single, $7,750 family (Extra $1,000 age 50+)

CHILD TAX CREDIT

In 2023, the child tax credit defaults back to $2,000 per qualifying child age 16 or under.
The credit for other dependents age 17+ will remain $500

MEDICAL EXPENSE THRESHOLD

For the 2023 tax year, the medical expense threshold will be 7.5% of AGI.

Here’s an example. Allie’s adjusted gross income is $100,000, she needs to be able to deduct more than $7,500 in medical expenses in order to be eligible for the deduction. Only expenses greater than $7,500 will count toward the deduction.

STANDARD DEDUCTION INCREASES

The 2023 standard deduction increases to the following:

  • Single or Married filing separately – $13,850
  • Married filing jointly or Qualifying widow(er) – $27,700
  • Head of household (HoH) – $20,800

Note: married couples over 65 each receive an additional $1,400 deduction, $1,750 additional if single or HoH

MILEAGE RATES

  • 65.5 cents per mile for business miles
  • 22 cents per mile for medical miles
  • 14 cents per mile for charitable miles

ENERGY CREDITS

  • Solar, Geothermal, Battery Storage: 30% of the expense
  • Home Improvements: $1,200 Annual Limit
  • Electric Vehicle: $7,500 Max Credit