2023 IRS tax guidelines: What you need to know

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TAX GUIDELINES FOR 2023 HAVE BEEN UPDATED BY THE I-R-S… AND THE CHANGES COULD IMPACT YOU AS WE ROLL INTO TAX SEASON….. ONE OF THE FIRST BIG CHANGES YOU’LL NOTICE IS BEING ABLE TO CONTRIBUTE MORE TO YOUR 401K. MARK HENRY WITH ALLOY WEALTH MANAGEMENT SAYS IF YOU’RE UNDER 50.. YOU CAN NOW CONTRIBUTE MORE THAN $22- THOUSAND IN YOUR 401K. IF YOU’RE OVER THAT AGE – YOU CAN NOW CONTRIBUTE $30- THOUSAND. OTHER BIG CHANGES INCLUDE RETIREMENT AND STANDARD DEDUCTIONS.. AS WELL AS EARNED TAX CREDITS. <> HE ALSO SAYS THIS TIME AROUND — CHILD TAX CREDITS AN

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2023 IRS tax guidelines: What you need to know

The IRS has made several changes to tax guidelines that could impact those filing this year

As the income tax filing deadly approaches in April, anyone who files should know the tax laws have drastically changed this year.Here are some of the changes: You can contribute MORE to your 401(k)The previous max contribution was $20,500In 2023, that will increase to $22,500Anyone 50 and older can contribute an extra $7,500May seem out of reach if you are struggling to pay the bills with inflation, but it’s nice to have the option to contribute more to a tax-deferred account If you claim Social Security benefits, you’re about to see an 8.9% increase in your paycheckYou must be at least 62 years old to start claiming your Social Security. But you can until you’re 70 (full retirement age) if you want to.If you plan to cash in on this big raise, talk to your tax professional about whether to change your withholdings.You may be entering a different tax bracket because of this extra incomeIf that’s the case, you’ll need to withhold more on your Social Security so you don’t get stuck with a huge tax bill at the end of the year. The 401K catch-up contribution limit is also increasing by $1,000 in 2023 – to $7,500.If you’re 50 or older, consider taking advantage of this and putting more into savings pre-tax.The catch-up contribution limit for an IRA, which isn’t indexed to inflation, will not change. Henry also said the IRS increased standard deductions for 2023.Married couples filing jointly: $27,700 ($1800 increase)Single taxpayers and married filing separately:$13,850 ($900 increase) The deadline to file is April 18, 2023. Those filing can also request an extension if needed.

As the income tax filing deadly approaches in April, anyone who files should know the tax laws have drastically changed this year.

Here are some of the changes:

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  • You can contribute MORE to your 401(k)
  • The previous max contribution was $20,500
  • In 2023, that will increase to $22,500
  • Anyone 50 and older can contribute an extra $7,500
  • May seem out of reach if you are struggling to pay the bills with inflation, but it’s nice to have the option to contribute more to a tax-deferred account
  • If you claim Social Security benefits, you’re about to see an 8.9% increase in your paycheck
  • You must be at least 62 years old to start claiming your Social Security. But you can until you’re 70 (full retirement age) if you want to.
  • If you plan to cash in on this big raise, talk to your tax professional about whether to change your withholdings.
  • You may be entering a different tax bracket because of this extra income
  • If that’s the case, you’ll need to withhold more on your Social Security so you don’t get stuck with a huge tax bill at the end of the year.
  • The 401K catch-up contribution limit is also increasing by $1,000 in 2023 – to $7,500.
  • If you’re 50 or older, consider taking advantage of this and putting more into savings pre-tax.
  • The catch-up contribution limit for an IRA, which isn’t indexed to inflation, will not change.

Henry also said the IRS increased standard deductions for 2023.

  • Married couples filing jointly: $27,700 ($1800 increase)
  • Single taxpayers and married filing separately:$13,850 ($900 increase)

The deadline to file is April 18, 2023. Those filing can also request an extension if needed.