Navigating the complexities of tax rules is a challenge that changes each year. Wondering about the key new tax laws for 2023? Look no further than Avid Financial Solutions (AFS). You don’t need to search for details about what impacts your 2023 taxes – we have it all streamlined for you.
New Tax Laws for 2023
AFS provides a comprehensive overview of the new tax breaks to help you maximize your return this tax season. Discover the essential 2023 tax laws and related changes below.
2023 Taxes and New Rules
Understanding the tax changes doesn't require a law degree. Simply review the situations below to see what applies to your life in 2023:
Student Loan Payments: With the resumption of student loan repayments in the fall of 2023, you might be eligible for a deduction based on the interest payments you've made.
ACA Healthcare Coverage: Due to a temporary rule change, more individuals can take advantage of the Premium Tax Credit (PTC), with expanded eligibility and larger credits based on income.
Energy Efficient Home Improvements: There are expanded credits for 2023, including:
Energy Efficient Home Improvement Credit (EEHIC): Qualifying installations or purchases might be eligible for a credit of up to $1,200 per year, with specific limits per item.
Residential Clean Energy (RCE) Credit: Installation of equipment like solar panels could earn you a credit worth 30% of your qualifying expenses.
Electric Vehicle Purchase: In 2023, credits for purchasing electric vehicles include up to $4,000 for used vehicles and up to $7,500 for new vehicles, subject to certain conditions and income thresholds.
Retirement Plan Distribution for Disaster Expenses: If you're in a federally declared major disaster area, you might be able to withdraw up to $22,000 from certain retirement plans without the usual 10% penalty, with a three-year window for tax payment.
State Tax Rebate or Relief Payments: Many state rebates or relief payments are not considered income at the federal level.
Other Tax Changes for 2023: AFS Guides You Through
The Internal Revenue Service (IRS) routinely updates common tax provisions to align with inflation, affecting various parts of the tax code. Beyond new laws, it’s essential to stay informed about these adjustments as you prepare for this tax season with Avid Financial Solutions (AFS).
Inflation Updates
Tax brackets and related amounts are adjusted annually for inflation. In 2023, these changes are particularly notable, with a 7% increase in the tax brackets and income tax rates.
What does this mean for you? The impact varies based on several factors, including your income. Generally, if your salary remained constant or increased less than the 7% inflation rate in 2023, you could see a reduction in your overall tax liability. These adjustments aim to mitigate “bracket creep” caused by inflation-induced income increases.
Additionally, updates to the standard deduction amounts are crucial. Most taxpayers can reduce their taxable income by choosing either the standard deduction or itemizing deductions. Be sure to review the updated standard deduction amounts for different filing statuses.
IRS Restarting Collections
The IRS had temporarily halted sending notices for unpaid tax bills as part of its pandemic relief efforts. Starting in the fall of 2023, the IRS will resume sending these notices for the 2022 tax year. If you have outstanding taxes for 2022, expect to receive a notification from the IRS.
Maximizing Your Tax Refund with AFS
Even if the new tax laws don’t directly apply to you, there are still opportunities to minimize your tax bill. With AFS’s expertise, you can explore various tax credits and deductions available for 2023.
Getting your maximum tax refund, even if new tax laws don’t apply to you
Whether you're filing taxes online or seeking personalized assistance, AFS is dedicated to helping you uncover every credit and deduction you're entitled to. Trust our team to guide you through these updates and ensure you get the maximum benefit in your tax return.
