Happy first day of tax season! We all know taxes can be a bit of a tangle, but fear not! I've put together a snapshot of the latest tweaks and updates to the tax code that could impact your 2023 tax returns. Consider this your go-to guide to stay on top of your tax game!
Riding Solo: Updates for Qualifying Surviving Spouses
If you've recently lost a spouse, you may be able to use the Qualifying Surviving Spouse filing status for two years after their passing. Keep in mind, there are specific criteria to meet, so make sure you check all the boxes before you file.
The Times They Are A-Changin': Digital is the New Virtual
Cryptocurrency buffs, pay attention! The IRS is freshening up its vocabulary—what was once "virtual currency" on your tax forms is now "digital assets." This means anything that's a digital representation of value (think Bitcoin and its friends) on that complicated stuff called a cryptographically-secured ledger. Don't forget, you'll need to spill the beans about any transactions involving these digital assets when you file.
Getting Paid in Crypto? Here's the Drill on Digital Asset Taxation
Celebrate or commiserate, if you're getting digital assets as payment for services, you've got to report the value in good ol' US dollars at the time you get 'em. Keep those virtual wallets in check!
Golden Years Tweaks: Required Minimum Distributions
Planning for retirement? Listen up! If you're reaching the ripe age of 72 after 2022, you don't have to start taking out those required minimum distributions (RMDs) until you're 73. Enjoy that extra year of compound interest!
Missed Your RMD? The Tax Man Lightens Up!
If you forget to take that RMD, the IRS has decided to play a bit nicer, cutting the excise tax from a hefty 50% down to 25%. And, if you're super quick to fix the miss, you might only be on the hook for 10% if it's related to an IRA.
Live Greener and Save: Energy Efficient Home Improvement Credit
Embracing energy efficiency could score you a nonrefundable tax credit up to $1,200 yearly for certain home upgrades. Just remember, there's a cap on how much you can claim for windows and such.
Drive Clean, Spend Less: Clean Energy Credits
Thinking about getting a heat pump or a biomass stove? You might snag a credit for 30% of the cost, up to $2,000. And for those of you eyeing a sparkly new clean vehicle, there's up to a $7,500 credit waiting, though there's fine print based on battery bits and your income.
Secondhand EVs Get Some Love Too
If you're going the pre-loved route with a used clean vehicle, you could get a credit of $4,000 or 30% of the sale price (for vehicles up to $25,000), depending on how much bread you're bringing in.
Remember, folks, these are just the highlights. There are a few more changes from our previous note, like updates to education savings bonds and health savings accounts—so be sure to check them out! And as always, if you're scratching your head or need a guiding hand, hit us up. We're here to help make sense of all the tax jargon and keep your wallet happy.
Until next time, stay savvy with those taxes!