New laws

Hi elath1169,

Not a lot of changes for tax year 2023.  

You will see an increase in the standard deduction, if you do not itemize;

Standard deduction increases as follows:

• Filing status of Married Filing Jointly increases by $1,800 to $27,700
• Filing status of Head of Household increases by $1,400 to $20,800
• Filing statuses of Single and Married Filing Separately increases by $900 to $13,850

Also, if you have dependents the Child Tax Credit (CTC) remains at 2022 thresholds:

• Nonrefundable credit
• $2,000 per child who meets the following requirements:
• Child is younger than 17 at the end of the year
• Child is son, daughter, stepchild, foster child,brother, sister, stepbrother, stepsister, grandchild, niece, or nephew
• Child can be claimed as a dependent
• Child doesn’t provide more than half of their support
• Child is U.S. citizen, national, or resident alien
• Child doesn't file joint tax return
• Child must have social security number
• Child must have lived with you for more than half of the tax year
• Additional Child Tax Credit (ACTC) encompasses the following:
• Allows taxpayer to receive up to $1,500 of the $2,000 child tax credit as a refund
• Families must have minimum of $2,500 of earned income to claim ACTC
• Phase out for both credits is based on modified adjusted gross income (MAGI) as follows:
• Filing status of Married Filing Jointly phase out begins at $400,000
• All other filing statuses phase out begins at $200,000
• Phase out is calculated as $50 reduction in the credit for each $1,000 (or part of $1,000) that MAGI exceeds the phase out amount.

Also there have been changes to the energy efficient home improvement credit;

Maximum value of $1,200 per year for qualified energy efficiency improvements, such as:

• Exterior windows
• Doors and skylights
• Building envelope components

Second, there is a different $2,000 per limit for the equipment cost and installation of new energy-intensive appliances, such as:

• Heat pumps
• Heat pump water heaters
• Biomass stoves and boilers

Third, as part of the $1,200 credit per year, it can cover up to $150 per year for the cost of performing a home energy audit to identify areas of needing energy efficiency improvements.

I hope you find this helpful!

Connie

Hi There:

Here's a real good article by Kiplinger which outlines the major changes to 2023, the biggest changes being changes to Income Tax Rates , Capital Gain Rates and energy credits.

2023 Tax law changes