April 15 — it seems far away, but when it comes to filing your taxes, the deadline will be here before you know it.
There are a few changes this year that help keep more money in your pocket.
“I think the biggest mistake is that people file their taxes before they receive all of their tax forms,” said financial planner Kristin Castello.
Castello also said the first thing you need to know is that income tax brackets jumped 7% for 2023.
The new standard deduction also increased by 7%, to $13,850 for individuals and $27,700 for married couples filing jointly.
There’s also a change for your IRA and 401K.
“The IRA contribution limit increased from $6,500 to $7,000 per person, with a $1,000 catchup if you’re over age 50 for 401(k)s, 403(b)s, all those sorts of retirement accounts, it increased from $22,500 to $23,000 and the catchup remains $7,500,” Castello said.
What about the rules for remote workers?
“If you’re self-employed, you can take deductions for your electricity, your utilities, the portion that is related to your business. If you do work from home, unfortunately, if you are an employee and you have an employer, you cannot take any deductions for your home office or your own, sort of home expenses,” Castello said.
If you’re into investing in cryptocurrencies, Castello said, “You’ll be receiving some more tax forms that are generated from those sorts of transactions.”
There’s good news if you bought an electric vehicle last year, Castello said.
“There is a credit that you can claim on your tax return for up to $7,500 for clean vehicles or for new vehicles and $4,000 for used vehicles,” Castello said.
If you want to find out what you can expect, Turbo Tax, H&R Block, NerdWallet and AARP all offer free tax refund estimators online. And once you do file online, the IRS says it issues most refunds within 21 days. Paper returns can take up to four weeks or more.