We look forward to welcoming you in the new tax season and I want to highlight what is new for the 2023 tax filing season. To better meet your needs, we offer both in person and virtual appointments. We encourage drop-offs and offer curbside service. For your convenience, you can now have your tax returns prepared without leaving your home using our secure document upload service and our e-Signature service for signing your tax returns. Sending tax documents via e-mail, even if the attachments are password protected, still leaves your private information vulnerable so we encourage you to use our secure upload service.
Items needed for the preparation of your 2023 tax return
- Copy of last year’s tax return
- Identification information for each person listed on the return, such as Social Security Numbers and dates of births.
- At any time during 2022, did you: receive, sell, exchange, gift, or otherwise dispose of a digital asset or a financial interest in a digital asset, such as virtual currency?
- W-2s, 1099s, Schedule K-1s and other tax documents issued to you
- Itemized Deductions. Though you may not be able to benefit from itemizing deductions on your federal tax return, you can still benefit from itemizing deductions on the state return Itemized Deductions typically include
- Medical and dental expenses including health insurance premiums not paid through your employer
- Property taxes
- Vehicle registrations
- Mortgage Interest (Form 109 Home Mortgage Interest Statement)
- Charitable contributions (cash and non-cash)
- IRA Distributions. Please note that some 1099-Rs for retirement distributions do not always indicate that the distribution was a QCD (Qualified Charitable Distribution) or was part of a Roth Conversion. If you had any of the above, please indicate amounts and the financial institution..
New for 2023
- Currently, the Child Tax Credit remains at the pre-2021 levels of $2,000 per child under the age of 17 as of 31 December 2023. Children age 18 or older can qualify you for the Credit for Other Dependents of $500.
- For 2023 the Child and Dependent Care Credit remains at 20% to 35% of up to $3,000 in eligible expenses for a child under age 13 or a disabled person and up to $6,000 for more than one qualifying child or dependent.
- IRS Inflationary Adjustments for 2023
- Standard Deduction increased for all filing statuses: Single & Married Filing Separate is $13,850, Head of Household is $20,800, and Married Filing Joint is $27,700.
- For 2023 the annual exclusion for gifts is $17,000.
- Below are the business and medical/moving mileage rates for 2023 and 2024
| Purpose | 2023 | 2024 |
| Business | 65.5 | 67 |
| Medical or Moving | 22 | 21 |
| Charitable | 14 | 14 |
- IRA Contributions: the maximum contributions for Traditional or Roth IRAs for the 2023 tax year have increased to $6,500 if you’re under age 50 and $7,500 if you’re age 50 or older. For tax year 2024 the limits increase to $7,000 and $8,000 respectively.
- In November 2023 the IRS revised the guidance on reporting thresholds for Forms 1099-K from third party payment networks, such as Venmo and PayPal, and online marketplaces.
- For 2023 they are required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions.
- For 2024, the IRS plans to lower the threshold to $5,000
Iowa Tax Updates
- The top individual income tax rate for 2023 is 6.0 percent, down from the rate of 8.53 for tax year 2022. Please note these rates do not include the School District Surtax.
- Iowa 529 Plan deductions. Iowa taxpayers can deduct up to $3,785 for tax year 2023 of their contributions to a 529 plan for each beneficiary. A married couple can contribute to separate accounts for each of their children.
- For tax year 2023, Iowa taxpayers can still make contributions until April 30, 2024 (Iowa’s tax filing deadline) and have those contributions deducted from their 2023 adjusted gross income. If taking this approach, be careful that these contributions are being made for tax year 2023 and not 2024.
- The deductible limit for contributions for tax year 2024 is $4,028.
- Per House File 2317, signed into law in March 2022, the Retirement Income Exemption is in effect as of January 1, 2023. The law “modified Iowa Code § 422.5(3)(a) to exempt from Iowa taxation all ‘retirement income’ for those who are disabled or 55 years of age or older and for surviving spouses”.
The tax deadline for the 2023 tax year is Monday, 15 April 2024. We can file an extension for you but note that it only applies to filing a return and is not an extension of time to pay taxes owed. When we file your extension, we can include an estimated tax payment to cover taxes owed so you can avoid penalties and interest.
Feel free to reach out to us with any questions you may have.
Sincerely,
M. Jon Brown, MBA, EA
