Tax season is in full swing! Whether you’re an early bird filer or a last-minute cruncher, here’s a breakdown of 7 significant changes that may affect your 2023 tax return:
1. Potential Child Tax Credit Boost
Congress is considering a tax deal that could expand the child tax credit for millions of families. This means more money back in your pocket, but the decision is still pending. Stay tuned for updates!
2. 1099-K Reporting Delayed (Again!)
Don’t panic if you sold things online and received a 1099-K form. The IRS has reduced the reporting threshold to at least $600 for 2023 taxes. However, you should still report all your income, regardless of whether you receive a form.
3. Free Tax Filing for More People
The IRS Free File program allows eligible taxpayers to file their taxes electronically for free. This year, the income limit has increased to $79,000, so more people can take advantage of this service.
4. Tax Brackets Adjusted for Inflation
Good news! Tax brackets have been adjusted for inflation, which means you might be in a lower bracket and owe less tax.
5. Standard Deduction Amounts Increased
The standard deduction, a set dollar amount that reduces your taxable income, has increased for 2023. This could put more money in your pocket. There’s also an extra standard deduction for those 65 and older.
6. Limited Direct File Pilot Program
The IRS is testing a new program that lets some taxpayers file directly with them for free. However, it’s currently limited to a few states and simple tax returns.
7. State Rebate Payments and Taxes
Most state rebates or stimulus payments you received in 2023 won’t be taxed on your federal return. But there are a few exceptions, so check with a tax professional if you’re unsure.
Remember: The tax deadline to file your 2023 return or request an extension is April 15th, 2024. Gather your records, double-check your information, and visit IRS.gov for more details.
