Tax Information for Americans At Home

While there has been talk for many years about a flat tax or postcard-sized returns, that is not yet a reality. Instead, the tax code continues to change, evolve and become even more complicated. Every taxpayer’s situation is unique and we are always ready to assist you with individual consults, but the following are changes for the 2023 filing season most likely to affect you. 

  • Standard Deductions—The individual deduction for 2023 increases to:
    • $13,850 single filers(+$1,850 for age 65+ single filers)
    • $27,700 joint filers (+1,500 for age 65+ joint filers)
    • $20,800 Head of Household)
    • Personal Exemptions have been suspended through 2025.
  • Itemized Deductions - Most filers are no longer able to itemize deductions since larger standard deductions were introduced a few years ago. Self-employed individuals who also have mortgages, especially those with home offices, may continue to find itemizing beneficial.
  • IRA Limits – The amounts individuals can contribute to 401(k) plans is $22,500. The limit on annual contributions to traditional and Roth IRAs are $6,500 for those under age 50 and $7,500 for those 50 and older.
  • Charitable Contributions – The $300 charitable contributions deduction, available only in 2021, has not been revived, so unless you itemize, you will be unable to claim cash contributions or property donations.
  • Capital Gains – The Long-Term Capital gains rate is 0% for those whose income does not exceed $44,625 for single filers and $89,250 for joint filers. A 15% rate applies to single filers up to $492,300 and joint filers up to $553,851. Additionally, a net investment income tax of 3.8% applies to most incomes over $200,000.
  • Earned Income Tax Credit — This is a refundable credit for low to moderate income working adults, even if taxes are not owed. This credit is available even without dependent children, for most people aged 25 - 64 with income under $63,398. For 2023, the maximum credit for single filers with no children is up to $600. For one dependent child, the maximum is $3,995. The credit depends on your earned income. *By law, EITC refunds cannot be sent prior to mid-February.*
  • Child Tax Credit—This tax credit has changed to $1,800 per child for dependents under age 17 with an income threshold of $200,000 ($400,000 for joint filers). This credit is available only for filers who lived with their American citizen child within the U.S. for more than half the year.
  • The ACA and Healthcare—The individual mandate was removed in 2019 so only those with Affordable Care Act health plans are required to report their healthcare coverage. Because these plans are reconciled with your income on your taxes, it is important to accurately estimate your income if you accept subsidies toward your ACA health coverage. Review your subsidy annually with for accuracy, as you will be required to repay any subsidy overpayments at tax time. If you received a subsidy for your ACA plan, you must report data from the form 1095-A statement from the Marketplace.