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Understanding the New Tax Laws for 2023

Understanding the New Tax Laws for 2023

Every year, new tax laws are enacted to keep up with the current economic climate, adjust for inflation, and ensure that the government’s revenue needs are met. Depending on their specific situation, these changes can have positive and negative impacts on taxpayers.

To prepare you for the 2023 tax season, we’ll start with a few of the necessary details you need to be aware of.

April 18, 2023, is the ultimate day to submit all federal tax returns and payments. Keep this date from sneaking up on you; ensure your taxes are filed and submitted before the deadline.

Take note: you must submit your request for an extension by October 16, 2023.

The standard deduction has substantially increased if you were filing taxes in 2022. Singles can expect a $12,950 deduction, while married couples who file jointly have access to an even more generous $25,900!

To keep pace with inflation, the income tax brackets were raised in 2022.

 

It’s never too soon to prepare for the upcoming tax season, so here is what you will need to know to be ready for 2024 taxes:

  • By the tax year of 2024, single filers will be eligible for a $13,850 standard deduction and married couples filing jointly can benefit from an increased rate of up to $27,700. This is an excellent opportunity to keep more money in your pocket when it comes time to file!

 

The income tax brackets are set to rise in 2023! To better understand how taxation will affect your finances this year, it is important to take an in-depth look at the details. That way, when filing taxes comes around again. You can do so with absolute confidence.

When is the Deadline to File My Taxes?

It’s that time of year again – tax season! Get ready for the start of 2023 taxes by January’s end, when W-2 forms from employers should be received. Many companies now utilize digital payroll systems and direct deposit, so watch for your form online.

 

All freelancers should pay close attention to any 1099 forms they receive from their clients.

Look at these additional tax forms – they could be helpful to you.

  • Mortgage interest statements
  • Investment income statements
  • Charitable contribution statements

Now is the perfect time to gather all your receipts if you want to itemize deductions so that you won’t be in a frenzy looking for them come April.

When you have all your forms in order, it’s time to take action and file your taxes. If there is any uncertainty that your documents are sufficient to begin filing, feel free to get help from an experienced tax expert- if things can be complex for you this year.

Higher Standard Deductions in 2022 and 2023

When filing your taxes, you can go with the standard deduction or take time to itemize every one of your deductions. Although it’s a bit more laborious, itemizing can be incredibly lucrative if all your deductions exceed what is offered for the standard option.

The standard deduction for tax years 2022 and 2023 has risen to remain current with inflation.

Should you select the standard deduction or itemize? Since everyone’s situation is unique, there isn’t one definite answer. Consult a taxation expert for advice if your tax case involves multiple deductions.

Smaller Tax Refunds for 2023

Unfortunate news: The IRS indicates taxpayers should expect reduced tax refunds in 2023. What’s the culprit? Two significant factors are to blame.

  • Unfortunately, no economic stimulus payments were issued in 2022; taxpayers will not receive additional funds for their 2023 tax refund checks.
  • The government reinstated the pre-COVID-19 tax credits and deductions like the child tax credit and charitable contributions deduction, making them more generous than ever.

However, receiving a refund check is only part of what it’s hyped up to be. Essentially, you’ve been borrowing money without interest from Uncle Sam throughout the year! A tax refund is just your own money coming back to you. Your hard-earned cash has been with them all along; they’re simply returning it now.

Rather than paying the IRS or receiving a refund each year, adjusting your tax withholdings will ensure that you owe nothing and get nothing from the government. By doing this, your hard-earned money stays in your paycheck – so it can come back to you with every payday.

If taxes are too complicated for you, there’s no need to stress. Don’t hesitate to reach out today to find out how we can help you! The Oasis Firm can take care of all your tax needs so you can get the best results with peace of mind.

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