Tax Law Changes For 2023
Each year, tax laws change the table for taxpayers and tax preparers. As a tax professional, you must inform your clients of the coming changes so they can be most prepared for the annual filing season and beyond.
IRS Changes To Tax Laws For Filing & Eligibility in 2023
Form 1099-K Rules Changing:
Hugely important to note for 2023 tax changes is the additional reporting of income for goods and services that exceeded $600 in 2022 from third-party payments. This will come to taxpayers as a Form 1099-K. There is no change to the taxability of income, and income including part-time work, side jobs, or the sale of goods is still taxable. Unless excluded by law, all income must be reported whether a 1099-K, 1099-NEC, or other form is issued.
No above-the-line charitable deductions:
In 2022, if taxpayers took a standard deduction, they cannot take an above-the-line deduction for charitable donations. During the pandemic, taxpayers could take up to $600 for this.
Expanded eligibility for the Premium Tax Credit:
There is temporarily expanded eligibility for Premium Tax Credit in the 2022 tax year. Make sure your clients know they could qualify for this if they still need to look into it.
Inflation Reduction Act - Claiming Tax Credit for clean vehicles:
There are new changes to the qualifications for buying a plug-in electric car or fuel cell vehicle in 2023 or after. Taxpayers who buy it for their use rather than resale and those who use it primarily in the U.S. can qualify for a credit of up to $7,500. More requirements to be eligible can be found here.
The above tax law changes listed are just a few that should be discussed as your clients are preparing to file their 2022 taxes and thinking ahead to the current 2023 tax year implications this could induce. If you are looking for more detailed information on the upcoming changes or changes currently in effect, check out our Courses page for webinars and courses that can help you be the most informed tax professional in your area.