Here’s what you need to know as you prepare to file your taxes for 2023
There are a number of changes for the 2023 tax season. Here’s what’s changed and what you should know as you prepare to file your tax return.
Claire Hardwick, TODAY USA
Remember, April 18 is the deadline for taxpayers to file their annual returns.
Tax day is usually April 15, but because that date falls on a Saturday and because of a Washington, D.C., holiday on Monday, the filing deadline was pushed back to April 18.
As of April 7, the Internal Revenue Service has processed more than 101 million returns. The average refund to taxpayers is $2,878, up from $3,175 at the same time a year earlier.
If you’re in a hurry to get your taxes done before midnight on Tuesday, here are some reminders of oft-forgotten items that may be deductible so you don’t miss them in your rush.
IRS check:What triggers it and what are red flags that are closely scrutinized
When specifying deductions, remember:
Medical and dental costs, health insurance premiums: If you itemize your deductions on Schedule A, you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. However, you can only deduct the amount of your total medical expenses that exceeds 7.5% of your adjusted gross income. Items you may deduct include reimbursements for physicians, dentists, surgeons, chiropractors, psychiatrists, psychologists, and non-traditional physicians, prescription drugs, dentures, reading or prescription glasses, contact lenses, hearing aids, crutches, wheelchairs, and more.
What are forms 8962 and 1095-A for?
Premium tax relief: If you purchased health insurance on Marktplaats, you must file Form 8962 with your tax return. The Affordable Care Act includes a special premium tax credit to help certain people pay health insurance costs, and Form 8962 used with your Form 1095-A Marketplace health insurance statement helps you determine your eligibility for the tax credit and , if so how much you are entitled to. Failure to submit this form may result in the IRS rejecting your return for incomplete information and delaying your refund.
If you are eligible for the tax credit, you can use it to:
reduce your taxes by claiming it when you file your income tax return, or reduce your monthly insurance payments. If you choose this option, the government pays money to your insurer during the year and you pay less on health insurance each month.
American Opportunity Tax Credit and Lifetime Learning Credit
Tuition fees, education costs: Two tax credits are available to individual filers with adjusted adjusted gross income up to $90,000 or $180,000 for joint filers: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
AOTC offers up to $2,500 credit per eligible student for as many as four tax years. The student must be pursuing a degree or other recognized degree and be enrolled for at least half of the time in at least one academic term commencing in 2022. LLC offers up to $2,000 credit per return for an unlimited number of years on one or more courses and does not require a degree.
SALT tax deduction
Real estate tax: If you itemize your deductions, you can only deduct state and local taxes, including property taxes, up to $10,000 ($5,000 if you’re married and filing separately). Note that the deduction is the total of a combination of taxes, including state and local income and sales taxes, as well as property taxes.
crowdfunding
GoFundMe Donations: Donations to a personal GoFundMe fundraiser, rather than to a charitable fundraiser, are generally considered personal gifts and are not guaranteed to be tax deductible. You won’t get a tax receipt from GoFundMe for this, the company said.
However, donations to GoFundMe fundraisers are guaranteed to be tax deductible in the US, UK, Canada, Ireland and Australia and will automatically receive tax receipts from GoFundMe’s charity partner, PayPal Giving Fund, according to GoFundMe. Donors in other countries will still receive the tax-deductible receipt by email, but will need to check with their local tax authorities to see if they are tax-deductible. Donations to these fundraisers are collected by PayPal Giving Fund, a non-profit organization, and distributed to the designated charity.
(If you received money through GoFundMe or another crowdfunding source, you may get a 1099-K from your payment processor if the amount meets certain reporting thresholds. You may need to report this income to the IRS.)
More of your 2022 tax season questions answered
Medora Lee is a money, markets and personal finance reporter for USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal financial tips and business news every Monday through Friday morning.
