As 2023 comes to an end, it is the beginning of the 2023 Income Tax filing season. We are in the office completing the required IRS training requirements, to keep up on the ever-changing tax codes, updating all our forms, and restocking our supplies for another very busy tax season. Last year with several area tax preparers retiring or closing their practices, we were overwhelmed with new clients. For the first time, we had to turn away many persons looking to get their taxes completed. We anticipate another busy year, so make sure you make your appointment early – don’t wait until the final weeks.

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  Federal Income Tax:
 

• Tax filing deadline is Monday, April 15th, 2024

• Other important dates:

  • ​January 16th: 4th Quarter 2023 Individual Estimated Payment Due

  • January 31st: Businesses – issue 1099s, W-2s and file W-3 and 1099-NECs

  • March 15th: Partnership and S Corp 2023 Tax Returns are Due

  • April 15th: IRA & HAS Contribution deadline for 2023

  • April 15th: 1st 2024 Estimated Payment Due.

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Residential Clean Energy Credit increased for 2023: (Formerly Residential Energy Efficient Property) The tax credit is increased to 30% for qualified expenditures in 2023 with no limit dollar amount and a carry forward for any unused credits. The rate is reduced in stages after 2032 for Solar Electric, Solar/Geothermal Hot Water, Fuel Cell, Small Wind Energy, Geothermal Heat Pump, Battery Storage Systems installed in homes. For smaller residential energy improvements such as Doors, Windows, Insulation Material, Central Air Conditioning, Furnaces, Home energy Audits, Heat Pumps, etc. there is now a $1,200/$2,000 annual tax credit available. Many of these tax credits also apply to second homes and new construction. Talk to us before you make any purchase to make sure you can obtain the credits.

 

• Corporate Transparency Act: If you are a small corporation or LLC, you will likely be required to report your beneficial ownership information to FinCEN by January 1, 2025 for existing entities. More information available at www.fincen.gov/boi 

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Changes to 1099-K reporting

Changes are in store for third-party settlement organizations, such as credit card providers and mobile payment services, and many gig workers (like Uber, Lift, Etsy,Ebay, etc) The new reporting threshold associated with Form 1099-K, Payment Card and Third-Party Network Transactions were reduced to:

• 1099-K’s have to be issued for any person receiving $600 or more in payments for the calendar year.(Was $10,000 per year).

• No Minimum number of transactions for the year. (Was 2,000 transactions)

Note: The IRS recently moved these reporting changes to go into effect for tax year 2024, but some of you still might be receiving these new 1009-K this year.

 

If you are 73 by the end of 2023 – you must take a Required Minimum Distribution (RMD) from your Retirement Accounts (IRA’s ,401(k)’s , etc.)

Make sure you check with your financial advisors to see if you are required to take the RMD and how much you need to take out. If you missed the 12/31/2023 deadline, you can elect to take out your RMD by 4/1/2024 – but then you must take out two (2) RMD in 2024.

 

Educators Expense Deduction

The tax deduction for educators with classroom expenses remains at $300.

 

Make Payment to the IRS Directly Electronically.

You can now pay federal estimated tax payments, pay a balance due from a current or past due income tax return Totally Free at www.irs.gov/directpay .

 

Standard Mileage Rates for 2023

The standard mileage rates apply for business miles, medical, charitable, and moving expenses (for military personnel only).

Business miles: $0.655 - Medical/Moving $0.22 - Charitable: $0.14

 

Social Security beneficiaries will receive a Cost-of-Living Adjustment of 3.2% in 2024 and Medicare Part B premiums will increase for most to $174.70 a month.

 

Up to $2,500 of Student Loan Interest is deductible:

If your income is below $75,000 for an individual ($155,000 for joint filers).

 

REMINDER: If you receive any correspondence letter from the IRS or State Taxing Authority, Please bring those complete letters to our office to review AS SOON AS POSSIBLE.

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Wisconsin Income Tax:

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• All Charitable Contributions go on federal Schedule A (same aa federal)

• Investment Income limits for Earned Income Credits increases to $11,000 (same as federal) .EIC is only available for Married Filing Joint (MFJ) filers and under specific requirements, MFS.

• If Student Loan Forgiveness takes effect – the total amount forgiven is taxable Wisconsin income.(Non-taxable on federal income taxes).

• Wisconsin Child & Dependent Tax Credit subtraction is NO longer available. NEW CREDIT is 50% of federal Child & Dependent Tax Credit. (not available for part-year or non-residents)

• Wisconsin is asking for taxpayer’s email addresses (both spouse’s) if they wish to receive all Wisconsin Tax correspondence from Wisconsin Department of Revenue.

• Effective in 2023 – Capital Loss deduction increases to $3,000 per year (up from the current $500).

• Edvest or Tomorrow Scholar 529 Plans can subtract a maximum of $3,860 per student, $1,930 MFS or divorced parent.

• If IRS adjusts any tax return, you MUST notify WDR within 180 days of any adjustment that effects your Wisconsin Return.

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Illinois Income Tax

 

Illinois Personal Exemption Allowance for 2023 is $2,425.00

The Illinois Tax Rate has not changed for 2023, it will remain at 4.95%