Tax Tips for 2023

Before you start stressing over taxes forms, read this guide for tips on filing taxes in 2023.

Dates to know

The tax filing deadline is April 18, 2023, and the Extension deadline is October 16, 2023.

Changes to the tax code

Here are some important tax code changes to note as you prepare to file.

  • Changes to the income tax brackets – Each income bracket range has increased to account for inflation. Visit irs.gov to ensure you’re filing correctly.
  • Increase in the standard deduction – $12,950 for single filers, $19,400 for single heads of household and $25,900 for married couples filing jointly.
  • Decrease in the Child Tax Credit – The Child Tax Credit was temporarily bumped up in 2021 as part of the American Rescue Plan Act (ARPA). In 2022, the credit returns to $2,000 for children aged 16 and younger. For other qualified dependents, you can claim a $500 credit.
  • Decrease in the Child and Dependent Care Credit – In contrast to the $8,000 credit of 2021, the Child and Dependent Care Credit returns to a maximum of $2,100 in 2022.
  • Decrease in the Earned Income Tax Credit (EITC) – The EITC returns to $500 for eligible taxpayers with no children.
  • Decrease in charitable deductions – Deductions for gifts and donations to public charities are now limited to 60% of Adjusted Gross Income (AGI) for cash contributions. 
  • Increase in Health Savings Account (HSA) contributions. The maximum you can contribute to an HSA is $3,650 for an individual and $7,300 for a family. Individuals age 55 and over can contribute an additional $1,000.

Other tax tips

Other parts of the tax code that are important to know and haven’t changed much for 2022 include the following:

  • Itemized vs standard deductions – If you have many tax-deductible expenses, you may benefit from itemizing your deductions.
  • Medical expenses-only medical expenses that exceed 7.5% of AGI can be deducted in 2022.
  • Retirement contributions Don’t forget to maximize your retirement contributions for 2022:
    • The deduction limit for 401(k) contributions for 2022 is $20,500, or $27,000 if you’re over the age of 50.
    • The maximum tax-deductible contributions for IRAs is $6,000, or $7,000 if you’re over the age of 50.

Tax time can be stressful, but you don’t have to go it alone. Use this guide for a smooth, stress-free tax season.

Posted in 
Everyday Life