Tax season is here again! Before you start stressing over those forms, read this guide for what you need to know about filing taxes in 2023.
Dates to know. Take note of these important dates as you start preparing your 2022 taxes.
- The tax filing deadline is Apri 18, 2023.
- The extension deadline is October 16, 2023.
Changes to the tax code. Here are some important tax code changes to note as you prepare to file.
- Changes to the income tax brackets. Visit irs.gov to ensure you're filing correctly.
- Increase in the standard deduction to $12,950 for single filers, $19,400 for single heads of household and to $25,900 for married couples filing jointly.
- Decrease in charitable deductions to 30% of AGI for contributions of non-cash assets if held for more than one year, and to 60% of AGI for cash contributions.
- Decrease in the Child Tax Credit to $2,000 for children aged 16 and younger.
- Decrease in the Earned Income Tax Credit (EITC) to $500 for eligible taxpayers with no children.
- Decrease in the Child and Dependent Care Credit to a maximum of $2,100 in 2022.
Tax code information to know. Other parts of the tax code that are important to know and haven't changed much for 2022 include the following:
- Itemized deductions - if you have many tax-deductible expenses, you may benefit from itemizing your deductions.
- State and local taxes - deduction for state and local income taxes, property taxes and real estate taxes is capped at $10,000.
- Mortgage interest deduction - the mortgage interest deduction is limited to $750,00 of debt.
- Medical expenses - only medical expenses that exceed 7.5% of AGI can be deducted in 2022.
- Miscellaneous deductions - no miscellaneous itemized deductions are allowed.
Retirement contributions. Don't forget to maximize your retirement contributions for 2022.
- The deduction limit for 401(k) contributions for 2022 is $20,500 or $27,000 if you're over the age of 50.
- The maximum tax deductible contributions for IRAs is $6,000, or $7,000 if you're over the age of 50.
Tax time can be stressful, so use this guide for a smooth, stress-free tax season.