Another tax season is upon us—the 2023 filing season opened on January 23 with increased staffing thanks to funds the Internal Revenue Service (IRS) received under the Inflation Reduction Act. The agency has added over 5,000 agents but still has a large backlog of prior year returns. The National Taxpayer Advocate has warned that the backlog creates “challenges for the 2023 tax filing season before it even starts” and to continue to expect delays and frustration for taxpayers.
Changes for the 2023 Tax Filing Season
Pandemic era relief has ended which will mean smaller refunds for many taxpayers. The following Covid related changes are no longer available:
- The recovery rebates available as tax credits on 2020 and 2021 tax returns are not available in the 2022 tax year.
- The expanded child tax credit (CTC) reverts to its pre-2021 amount worth up to $2,000 per child, with an earnings requirement and limited refundability of $1,500.
- The child and dependent care tax credit (CDCTC) reverts from $8,000 in 2021 to $2,100 for the 2022 tax year.
- The above-the-line charitable deduction worth up to $600 for joint filers is not available for the 2022 tax year, but the itemized deduction for charitable donations remains.
2023 Tax Filing Deadline
The filing deadline to submit 2022 tax returns or an extension to file and pay tax owed is Tuesday, April 18, 2023, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays. The due date is April 18, instead of April 15, because of the weekend and the District of Columbia’s Emancipation Day holiday, which falls on Monday, April 17. Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.
As always, please reach out to your MAI advisor if you have any questions about your specific tax situation.
Authored by Kathy Buchs, CPA, MT, Senior Tax Advisor & Team Leader, MAI Capital Management
Information updated as of 02.09.2023.
Please send your questions, comments and feedback to: info@mai.capital. The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein. In accordance with certain Treasury Regulations, we inform you that any federal tax conclusions set forth in this communication, were not intended or written to be used, and cannot be used by any taxpayer, for the purposes of avoiding penalties that may be imposed by the Internal Revenue Service.
