Kathy Tomasiak, CPA

Reviewing…The Tax Cut and Jobs Act:

INDIVIDUAL TAX RATES are 10%, 12%, 22%, 24%, 32%, 35% and 37%.

PERSONAL EXEMPTIONS have been eliminated.
(Keep in mind – names, social security numbers and birth dates of dependents will be needed for possible other credits available)

Tax Cut and Job Act

CHILD TAX CREDIT is $2,000 for a qualifying child under age 17
(Phase out provisions are more favorable allowing more taxpayers to be eligible for this credit)

STANDARD DEDUCTION for 2023 according to your filing status:

  • Married filing jointly – $27,700
  • Head of Household – $20,800
  • Single – $13,850
    Note – those 65 and older receive an additional deduction

REMINDER, your deductions, listed below are a few things to consider:

Medical deductions are first reduced by 7.5% of adjusted gross income

The total of all state/local/real estate taxes are limited to $10,000

Miscellaneous itemized deductions subject to 2% adjusted gross income have been eliminated. These expenses include unreimbursed employee business expenses, investment expenses, tax preparation fees, advisory fees from brokerage accounts, safe deposit boxes, etc.

529 PLANS expands the definition of “qualified education expenses”:

Funds can be used for elementary and secondary public, private or religious schools

  • $10,000 per student, per year allowed
  • Funds can be used to pay student loans
  • $10,000 per beneficiary, lifetime

Other Updates Include:

  • Required Minimum Distribution age limit has increased to 72 years old
  • There are rules as to who is eligible based on the day you turn 70 ½
  • Contributions to IRA’s no longer are restricted by your age as long as you have to have earned income and qualify to make a contribution
  • No RMD was required for 2023

HSA Contributions

2022 – Single Plan $3,650
2023 – Single Plan $3,850

2022 – Family Plan $7,300
2023 – Family Plan $7,750

Over 55, an additional contribution of $1,000 is allowed

Keep in mind, contributions to HSA’s for a 2023 deduction can be made up until the tax filing date, Tuesday, April 15, 2024.

  • Annual exclusion for a gift is $17,000
  • Alimony payments are no longer deductible by the payer or included in income of the recipient, for agreements executed after January 1, 2024.
  • Social Security annual wage base for 2023 is $160,200