News You Need to Know
What's new and what to consider for the 2023 tax-filing season
What's new and what to consider for the 2023 tax-filing season
The IRS continues to provide tips to help tax professionals and taxpayers as we approach the 2023 tax filing season. The agency provides a page to help taxpayers "get a jump" on their 2023 taxes, which is updated periodically.
In addition to the IRS website, here is a compilation of what's new – and key items to consider – as you prepare for the 2023 filing season. Taxpayers who have received third-party payments in tax year 2022 for goods and services that exceeded $600 should receive Form 1099-K, payment card and third-party network transactions.
Some tax credits have returned to 2019 levels.
Many of the pandemic-era and ARPA credits expired at the end of 2021, so many tax credits have returned to pre-pandemic levels. Impacted credits include the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Credit. Due to these changes, many taxpayers will likely receive a significantly smaller refund compared with the previous tax year.
In 2022, there are no above-the-line charitable deductions.
During COVID, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. That change has expired, so in 2022, those who take a standard deduction may NOT take an above-the-line deduction for charitable donations.
The Premium Tax Credit is still available – and may be available to more taxpayers.
The premium tax credit– also known as PTC – is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace.
For tax years 2021 and 2022, the (ARPA) temporarily expanded the premium tax credit eligibility, eliminating the rule that a taxpayer with household income above 400% of the federal poverty line cannot qualify for a premium tax credit.
Eligibility rules to claim a tax credit for clean vehicles has changed.
The passing of the Inflation Reduction Act of 2022 (IRA) has shaken up electric/clean vehicles with multiple – and detailed – changes. Tax credits available under section 30D (EV credit) for purchasing a new electric vehicle after August 16, 2022 (when the Inflation Reduction Act of 2022 was enacted) are generally available only for qualifying electric vehicles for which final assembly occurred in North America.
The Department of Energy has provided a list of Model Year 2022 and early Model Year 2023 electric vehicles that may meet the final assembly requirement.
Look for more guidance in the next few weeks.