The basics of tax filing never change. Every year, you must declare all of your earned income, claim any deductions or credits you’re entitled to, and ensure that you’ve paid the appropriate tax.
But some of the specifics of tax filing are subject to change from year to year. For example, the income levels assigned to each tax bracket tend to change and, in some years, the actual tax rates themselves may also change.
For those filing their 2022 tax returns in 2023, there are some relatively significant changes to report. They won’t apply to all taxpayers, but all taxpayers should still be aware of them.
Here are the most important changes for tax filing in 2023.
Tax Filing Date
Taxes are due Tuesday, April 18. Traditionally, filing day is April 15. But April 15 is a Saturday in 2023, and Monday, April 17, is the federal holiday for Emancipation Day, so taxes are not due until April 18.
IRA Contribution Limits
From 2019 to 2022, the IRA contribution limit was $6,000. For qualifying taxpayers 50 or older, a catchup provision allows an extra $1,000.
401(k) Contribution Limits
For tax year 2022, individuals could contribute as much as $20,500 to their 401(k) plans. This limit applies to other qualified retirement plans as well, such as 457 plans, 403(b) plans and the government’s Federal Thrift Savings Plan. The catchup limit for people 50 or older was $6,500.
Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit
In response to the pandemic, certain tax credits, particularly regarding children, were boosted to help families make it through more easily. But most of those enhancements expired at the end of 2021, meaning they were unavailable for tax year 2022. Specific changes for tax year 2022 include the following:
- The Child Tax Credit dropped from $3,600 per dependent to $2,000
- The Earned Income Tax Credit dropped from $1,500 to $560 for taxpayers with no children
- The Child and Dependent Care Credit saw a significant drop, returning to $3,000 from the enhanced level of $8,000
Above-the-Line Charitable Contributions
In response to the COVID outbreak, the government allowed taxpayers to take $600 above-the-line deductions for charitable contributions, regardless of whether they itemized. That provision also expired at the end of 2021, meaning for tax year 2022 charitable deductions must once again be itemized.
Electric Vehicle Tax Credits
Eligibility for electric vehicle tax credits changed greatly near the end of 2022, thanks to the passage of the Inflation Reduction Act on Aug. 16. The $7,500 electric vehicle credit now applies in full only to vehicles with final assembly in North America.
By March 23, additional requirements will be in place, including the price of the vehicle and the percentage of battery components sourced from the U.S. or one of its free trade partners.
But as far as filing your taxes for 2022 goes, you’ll have to worry about the North American assembly requirement only for vehicles purchased after Aug. 16, 2022.
Special Mention: Form 1099-K Reporting Requirements
If you receive payments from third parties, such as for gig work or perhaps rentals on Airbnb, you may receive Form 1099-K. Prior to 2022, Form 1099-K was issued only if the total number of transactions exceeded 200 and the aggregate value exceeded $20,000.
That was all slated to change in 2022, thanks to the passage of the American Rescue Plan Act of 2021. In 2022, those limits were set to drop to a single transaction in excess of $600. But on Jan. 3, 2023, the IRS delayed implementation of this change until 2024.
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