Hey, Pensacola moms! As we brace ourselves for tax season, I know it feels a bit like gearing up for a major holiday—exciting for some, overwhelming for most.
But, just like planning the perfect family vacation, I’m here to navigate you through the latest tax law changes for 2023, making sure you can file with ease and maybe even unlock some delightful tax breaks along the way.
With nearly a quarter-century of experience tucked under my belt (gosh, I sound old), helping moms and dads tackle their taxes, I’ve seen it all—the good, the bad, and the confusing.
So, let’s dive into what’s new and what it means for you.
Child Tax Credit Expansion: Not A Game-Changer…But Every Bit Counts
Before you rush to file, here’s a heads-up for those with kiddos under 17. There’s talk in the Senate about a Child Tax Credit Expansion for the 2023 tax year. They’re aiming to adjust the credit with inflation, potentially adding an extra $200 per qualifying child. While it might seem small, every penny counts in our world of endless diapers, soccer practices, and teenage appetites.
Already Filed? Here’s the Scoop
Don’t sweat it if you’ve already sent off your tax return. Tax laws changing after you’ve filed is like finding out school is canceled after you’ve already dropped off the kids—it happens. Typically, the IRS will adjust your return and issue any additional refunds directly. If the bill passes, they’ll guide us on the next steps, so for now, hold tight and avoid amending your return to sidestep any delays.
Annual Adjustments You Should Know About
Like clockwork, some things change every year:
- Tax brackets and standard deductions have seen a bump.
- Contribution limits for IRAs and 401(k)s are up.
- The annual gift exclusion now stands at $17,000 per person.
- And for those who are 73 or older, or if you’re helping someone who is, make sure those Required Minimum Distributions (RMDs) are on your radar.
Noteworthy Retirement Tweaks rolling out for the 2023 and 2024 tax years
If you’re under 59½ can now make penalty-free early withdrawals from IRAs and 401(k)s for specific situations—up to $10,000 for domestic abuse survivors and $1,000 for emergencies.
Have you got a 529 plan with leftovers? You can roll those funds into a Roth IRA tax-free, up to a $35,000 lifetime limit, given the account’s been open for over 15 years.
Roth 401(k) holders, rejoice! No more Required Minimum Distributions, aligning with Roth IRA rules.
A Few More Nuggets of Wisdom
Keep those tax records for seven years, but forget the clutter. Digital copies are your friend—scan them or snap a photo with your phone.
Lost in the tax maze? Ask for help. There’s no shame in it. In fact, why not turn it into a teaching moment? Get the kids involved and demystify taxes together. It’s a life skill they’ll thank you for later.
Facing a balance due? File on time to avoid the late-filing penalty, even if you can’t pay in full by April 15. The IRS can work with you on payment options, minimizing the financial sting.
Remember, while I’m here to share my insights, consulting a CPA or financial advisor is always a smart move. They’re the GPS to your tax journey, ensuring you reach your destination smoothly and with a few extra dollars in your pocket.
