2023 Tax Preview Newsletter
Dear Clients & Friends,
April is here and we are going full blast towards the April 18th tax filing deadline, wrapping up as many returns as possible . If you haven’t been able to bring in your tax organizer and supporting documents there is no need to panic, you will automatically be put on extension until October 18th. Someone from our office will contact you in the next couple of weeks if an extension payment is needed.
As a result of a couple tax laws enacted by Congress in fall of 2022, there are many tax changes that take effect in 2023. As always planning is one of the important keys to having a successful tax result. To get a jump start on planning for 2023, start by maximize funding to your retirement accounts. It’s also important to note the annual contribution limits of your retirement plan and adjust accordingly. If you haven’t already done so you should consider setting up retirement accounts for a spouse or dependents, review contributions to other tax-advantaged plans like flexible spending accounts and prepaid medical savings plans. Make sure your tax withholdings for the year are adequate, nothing stings more than having to pay more than expected because you didn’t plan accordingly. Take a look at the tax brackets in the enclosed newsletter for this and other key changes for 2023.
In 2023, the IRS and Social Security Administration have made some cost-of-living adjustments to help with inflation. What does this mean for you? While tax rates are staying the same, the brackets related to these tax rates are increasing by 7.1%. Which means, you will potentially have more of your income taxed at a lower rate and that could help offset some of the higher prices you see in stores. Social Security benefits are also increasing by 8.7%, this will increase monthly checks. With this most recent increase in Social Security benefits, maximizing this retirement benefit may help you with future benefits. If you haven’t already done so, now would be a great opportunity to set up and review your Social Security account on the SSA website.
Cryptocurrency is considered a type of property by the IRS and they are stepping up their enforcement efforts to capture all crypto transactions. To stay within the tax rules, you should keep accurate records, set money aside to pay any taxes and expect to receive a 1099-B Form from all brokers you have bought or sold digital currency with. Businesses that accept digital currency as payment may be required to report transactions above $10,000. The IRS is cracking down and it’s important to fully read up on cryptocurrency taxation before diving into it. With the extra reports and complicated tax requirements, it may not be for everyone.
Please contact our office if you have questions concerning any information in this newsletter. We’re always here to help our clients. Friday, April 21st is our end of tax season “Relief Day” and the office will be closed. We’ll reopen Monday, April 24th at 8:30 a.m.
2023 Tax Preview Newsletter – Starkey & Company
Thank you for your continued patronage. We appreciate any feedback you have on the services we provide. Only with feedback can we improve the experience you have with our firm.
Sincerely,
Starkey & Company, PA