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2023 Tax Changes & Updates

Updated: Jan 13

It’s that time of the year where businesses & individuals circle the wagons to begin planning for the upcoming tax season. Developing a tax plan can help to reduce or eliminate upcoming tax liabilities, and helps make smart business decisions for the years ahead. Not to be overlooked are IRS changes to the Tax Code, and other updates. These annual changes can play a big role in determining directions of the afore mentioned Tax Plan. Here is a thorough list of the updates, and changes to the tax code in 2023.

Standard Deduction

The Standard Deduction continues to make a habit of climbing since 2017. This year, it has increased to $13,850 for single filers and $27,700 for married couples filing jointly, making it a rarity to take the itemized deduction. To do so, the combination of the taxpayers items from Schedule A must exceed the Standard Deduction. Itemized expenses include things like medical expenses over 7.5% AGI, sales/income & real estate taxes, mortgage interest & charitable donations all need to exceed the amount of your Standard Deduction given above.

Tax Brackets

Tax Brackets increase in 2023, and the typical major tax planning gaps remain between the 12% & 22% brackets, and the 24% & 32% brackets.

Retirement Contributions

Maximum retirement contributions to a 401(k) or (b) are now $22,500, up from $2,000 from last year. If you contribute to a Traditional or Roth IRA that amount is now $6,500 up $500 from last year. The catch-up contributions for individuals 55 or older are $7,500 to 401(k) or (b), and $1,000 to the IRA.

Secure Act 2.0

The Secure Act 2.0 came along with the hope of getting employees to start putting money away for retirement. These are voluntary contributions that come out of your pocket that are submitted to a third party retirement plan. Again, it is voluntary so opting out is an option.

There were several other things that came along with the Secure Act 2.0 and for a more detailed analysis I have written an article going through the ins & outs. Click HERE for the breakdown!

Business Changes

Beneficial Ownership Information Reporting

In 2024, There is a new filing requirement in 2024 for LLC’s, and many folks are being caught off guard. Who all is affected? Well, 99% of the small business registered to do business in the US will be required to comply! And the penalty for noncompliance is $500/day up to $10,000!

For a more detailed article on this filing, and if you'd like our help being compliant, please Click HERE.

Meals & Mileage

The last couple of years business owners have enjoyed a 100% deduction for their business meals. That percentage has come back down to the pre-COVID era amount of 50%. The standard mileage rate, however, went up to 65.5 cents per mile which is its highest percentage ever.

Bonus Depreciation

Since 2017, Bonus Depreciation has allowed a 100% deduction for qualifying assets. That percentage begins to throttle down in 2023 at 80%, and is further reduced by 20% in each subsequent year until completely phasing out in 2027. This plays a much larger role when it comes to tax planning because you may be able to take Section 179 on that same property. Section 179 cannot create a loss, but may help to further reduce taxable income to $0.

Things to Note

Earned Income Tax Credit (EITC)

The Earned Income Credit is often overlooked by taxpayers that would have qualified! This is a HUGE credit to miss out on! There are several things that affect the credit, but the main qualification is to be self-employed and make within a certain range of income. The other two factors are having children, and being disabled.

The credit is sometimes missed when the tax return is being self-prepared, and certain questions are not answered, or are answered incorrectly. I’ve even seen this credit slip past paid tax return preparers. Be sure you don’t miss out! The IRS has a very handy tool where you can check to see if you qualify even before logging on to file your taxes, or submitting them to your accountant for preparation. Click HERE to check out the tool.

Tax Planning

Need tax planning? Some tax preparers won’t even offer it. They’re either too busy or prefer to take time off in the fall. At Rangeview Tax & Accounting we put our clients first and are committed to helping them achieve financial success! That all starts with planning and is offered along with a paid tax return. Our free planning session each fall will give you access to a baseline tax projection, as well as one basic scenario! We continue to offer planning services to clients throughout the year as needed for our normal hourly rate. Click Here for my article discussing Tax Planning in greater detail.

Ready to get started? Please book a Free Discovery Appointment below to discuss any questions that you have about your planning. If you’re ready now book your Tax Planning Consultation today, and we’ll get to work on your customized tax plan. Get the peace of mind of having a plan in place!

Book a Free Discovery Appointment

See if Rangeview Tax & Accounting is a good fit for you with a Free Discovery Chat! We offer in-person, on-site, and telephone discovery chats. On site chats are typically business with exceptions available under appropriate circumstances for individuals.

Book a Paid Consultation

Our paid consultation is $50 and puts you on the line with a tax professional who will answer questions that you have related to IRS Code, and Tax Strategies. Pay for your consultation, select one of the available appointments, and provide the general topic of discussion or questions that you wish to discuss. If you choose to move forward with our services, we will credit the consultation fee towards a future tax return preparation.

Tax Projections

Stay on top of the upcoming filing season with a tax projection! We will collect various data including current pay stubs, expected business income, and more extraordinary situations like selling a home, rental, or business. From there we annualize the figures and run a mock tax return to get a good idea of an expected tax liability. This gives us a baseline in which we can further advise tax planning strategies that may apply.

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