ORLANDO, Fla. – The tax deadline is fast approaching. April 18th is the last day you can send snail mail taxes or hit send electronically.
US residents received a few extra days due to the weekend to file all the paperwork. The average refund last year was almost $3,500. However, there are some changes this year you may need to be aware of.
2023 comes with a standard deduction increase to 12,950 dollars for single filers and married couples filing separately; 19,400 dollars for head-of-household filers, that includes single parents; and 25,900 dollars for married couples filing jointly.
As for charitable donations, the $600 charitable deduction for non-itemizers, folks taking the standard deduction, has gone away.
If you found yourself with hefty medical bills in 2022, you can deduct any medical expenses above 7.5% of your adjusted gross income.
If you’re self-employed there are many deductions you can claim on your tax return, including travel expenses and the home office deduction. However, if you’re one of the millions of people who work remotely, you won’t be able to claim the home office deduction since it’s reserved for self-employed people only.
If you are on the road for work, you have two mileage rates. 58.5 cents a mile applies for travel from January through June last year; and it’s 62.5 cents per mile from July through December.
If you have children, the child tax credit lets you credit up to $2,000 per dependent child under the age of 17. The income limit is $400,000 for married filing jointly and $200,000 for all others.
The bad news is, the IRS warned people to expect smaller tax refunds in 2023. This is due to two big reasons. First, there were no economic impact payments in 2022, so taxpayers won’t get an extra stimulus payment in their 2023 tax refund checks. Second, expanded tax credits and deductions, like the child tax credit and charitable contributions deduction, reverted to their pre COVID-19 amounts.