Tax Year 2023
Welcome to 2024!
I hope that each of you had a lovely holiday and that the New Year is off to a good start.
2023 was rather uneventful when it comes to tax changes The Inflation Reduction Act of 2022 made very welcome changes to the energy efficient tax credits. Hopefully many of you have taken advantage of the new and revised credits to make energy improvements to your homes.
Big news on the tax preparation front: My portal has changed. The portal is now through a different provider called Encyro. When I upload your docs, you will receive an email with a link in the email. This will save you a step in logging on. The first time you use it, you will need to set a password. To access your docs, select the form and click download. You can then save the file on your computer. Your account is tied to your email address. If you want to use a different email address than in the past, I can change it for you.
The process to uploading your docs will be similar to the previous portal. You can drag and drop or browse and select.
With the increased standard deductions, many people who had traditionally itemized their deductions have taken the standard deduction for the past several years. For 2023 the standard deductions are: $13,850 for Single and $27,700 for Married filing jointly. Those age 65 and above have additions to these deductions (S- $1,850; MFJ- $1,500). For many state returns, the deductions are tied to the federal. In some cases, it saves overall to itemize deductions even when the total is less than the federal standard because of the savings for the state. Feel free to send all of your itemized deduction figures so that I can evaluate which works best for you. With the $10,000 cap on deductible taxes, the sales tax deduction can sometimes be more advantageous than the state tax deduction. If you bought a car in 2023, be sure to give me the sales tax paid. Also, include non-taxables such as VA disability for this calculation.
For retirement contributions: the IRA contribution increases to $6,500 (plus $1,000 for those age 50+) for 2023. This increases to $7,000 for 2024. Contributions to employer plans (401k, 403b, TSP) are $22,500 (plus $7,500 for age 50+) for 2023 and $23,000 (plus $7,500 for age 50+) for 2024.
You have probably already begun to receive those precious envelopes marked: "Important Tax Information". I am ready as soon as you get your info together.