DISCLAIMER: Any tax advice noted below is based on the facts provided to us and on current tax law interpretation. Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties. Should the information below be incorrect or incomplete or should the law or its interpretation change, our advice may be inappropriate. We are not responsible for updating our advice for changes in law or interpretation after the date noted above. The following cannot be used as support in any tax audit.
In order to better serve you, if you are planning a vacation or extended trip away from home during tax season, please be sure to let us know. If you started a business or purchased or sold a rental property and you did not discuss this with Denise in advance, please call our office and bring this change to our attention.
Mileage Rates and Per Diem Rates
PLEASE NOTE, THERE ARE 2 DIFFERENT RATES FOR 2022:
|Standard mileage rates:||1/1 through 6/30/2022||7/1 through 12/31/2022||2023|
|Business or Employer||0.585 cents||0.625 cents||0.655 cents|
|Medical and Moving||0.18 cents||0.22 cents||0.22 cents|
|Charitable||0.14 cents||0.14 cents||0.14 cents|
For the first time the maximum educator expense deductions rises to $300 for 2022. Educators can deduct the unreimbursed cost of:
- Books, supplies and other materials used in the classroom
- Equipment, including computer equipment, software, and services
- COVID-19 protective items which includes face masks, disinfectant for use against COVID-19, hand soap, hand sanitizer, disposable gloves, tape, paint or chalk to guide social distancing, physical barriers, such as clear plexiglass, air purifiers and other items recommended by the CDC
- Professional development courses related to the curriculum they teach or the students they teach. Before using this cost as an educator expense, check to see if this expense would qualify for the lifetime learning credit
Student Loan Forgiveness
Student loan forgiveness is not taxable in the State of PA.
Simplified Employee Pension (SEP) Contributions
There are various rules related to contributing to your SEP plan; our clients should contact us for information. For 2023 the maximum contribution is $66,000, which has increased considerably from the 2022 maximum contribution of $61,000.
There are various rules related to contributing to your IRA; our clients should contact us for information on this. The 2022 maximum contribution for IRA contributions has not changed; for those less than 50 years old the maximum contribution is $6,000 and for those 50 years and older the maximum contribution is $7,000. For 2023 these amounts have changed. The maximum contribution you can make to your IRA if you are less than 50 years old is $6,500; if you are 50 years or older you can contribute $7,500 to your IRA.
HSA Annual Contributions
There are various rules related to contributing to your HSA account; our clients should contact us for information on this.
For the 2022 calendar year, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $3,650. The annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $7,300. For 2022, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductible, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage.
For 2023, the annual limit is $3,850 for individual and $7,750 for families. Maximum catch-up contributions for people over 55 is $1,000. For 2023, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,500 for self-only coverage or $15,000 for family coverage.
Gift Tax Exclusion
For 2023 the amount of the gift tax exclusion is $17,000. This is an increase from the 2022 amount of $16,000.
The PA government and local municipalities do not allow taxpayers to deduct per diem rates on their income tax returns. You must use your actual expenses.
Check your bank – did your check/payment clear your bank?
Anytime you issue a check to any government agency please be sure the check clears your bank. If the check does not clear your bank within 20 days you need to contact the agency. The bank might be able to help you. If it was from a tax return we completed please call our office so we can resolve the problem.
Receive your refunds faster and securely by having your refund directly transmitted to your bank and deposited into your checking or savings account. You can even transmit your refund to your IRA account. If you plan on depositing your refund into a checking or savings account we will need a photocopy of a blank check or bank identification card, not your debit card. A deposit slip cannot be used. We also need the bank’s routing number and your account number.
Your 401k Statements
Save all your year-end 401k statements until a few years after the account is closed. Include your year-end statement with the tax information you give us at the end of the year.
Whether you are getting married or going through a divorce, here is a list of items to keep in mind while going through this life event:
- Change of name – report it to the SSA. File Form SS-5, Application for Social Security Card. You can either go online to SSA.gov to download and print the form or you can call SSA at 800-772-1213 to order the form, or get it from your local SSA office.
- Change tax withholding – Our clients should contact us before making changes to their Form W-4.
- Changes in circumstances – if you receive advance payments of the premium tax credit you should report the changes in circumstances, such as marriage or divorce, to your Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments.
- Change of address – Our clients should call us with their new address. Let the IRS know if you move. File Form 8822, Change of Address, with the IRS. We will file this form for our clients if you notify us of your address change. You should also notify the U.S. Postal Service. You can change your address online at USPS.com or report the change at your local post office.
- Review and if needed, change beneficiaries.
- Change your Will.
Having a yard sale? Please read the following –
Have you ever wondered if you need to pay taxes on the income you earn from selling your used stuff? Typically, since the items sell for far less than what you paid for them, the transaction is tax-free. As long as this is a once or twice a year event—and not a set-up at a farmer’s market or flea market on a regular basis—then you don’t need to worry about profits and losses, sales tax or self-employment tax.
The #1 item most taxpayers forget to bring to their tax appointment is the correct last YTD payroll stub for the calendar year from all of their employers. Look for the last payroll check you received which is dated December 2022. Below is a list of important items most taxpayers forget to bring to their tax appointment. Always remember an easy rule, if you are not sure if we need the document, bring the document to your tax appointment:
- College tuition quarterly/semester billing statement
- Real Estate Taxes – School, County & Township (most homeowners get a bill in the spring & fall of each year). For your own protection please ask the tax collector to stamp your real estate tax bills paid. If you will be filing a property tax rebate your real estate tax bills must be stamped paid from the tax collector.
- Schuylkill County Residents who are not retired, don’t forget your Occupational Privilege Assessment you pay with your real estate taxes.
- December 31 odometer reading on vehicles used for business, rental or employers use.
- Business or employer miles, along with commuting miles.
- Employee business expenses – uniforms, union dues, etc.
- Year-end inventory for business owners.
- Sale proceeds and date of sale on property or securities sold.
- Purchase date and cost of property or securities sold.
- Real estate settlement sheets for refinancing in 2021 and any land or real estate you purchased in 2021.
- Canceled checks for all estimated tax payments
- Last payroll stub from each employer for the tax filing year, the check will be dated on or before December 31, 2022.
- Year-end 401k statement.
- Health insurance verification if purchased through the Marketplace.
Please remember that our web site is updated twice a year. Tax laws change throughout the year. Certain tax laws may not impact all of us the same. It is very important to contact our office if you have any concerns or questions related to the above information.
DISCLAIMER: Any tax advice noted above is based on the facts provided to us and on current tax law interpretation. Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties. Should the information below be incorrect or incomplete or should the law or its interpretation change, our advice may be inappropriate. We are not responsible for updating our advice for changes in law or interpretation after the date noted above. The following cannot be used as support in any tax audit.