What's New for 2023:

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You may need a paycheck checkup. Following tax law changes, you should do a paycheck checkup using the IRS’s Withholding Calculator and, if necessary, complete a new W-4 form. The calculator helps determine the right amount of withholding.

 

You should check your withholding if you:

 

Are a two-income family.

Have two or more jobs at the same time or only work part of the year.

Claim credits like the child tax credit.

Have dependents age 17 or older.

Itemized deductions in 2022.

Have high income or a complex tax return.

Had a large tax refund or tax bill for 2022.

 

Standard deduction amount increased. For 2023, the standard deduction amount has been increased for all filers, and the amounts are as follows.

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Single - $13,850.

Married Filing Jointly - $27,700.

Head of Household - $20,800.

Married Filing Separately - $13,850.

Due to the increase in the standard deduction and reduced usage of itemized deductions, you may want to consider filing a new Form W-4.

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Deduction for personal exemptions are suspended for 2018-2025. For 2023 you can’t claim a personal exemption deduction for yourself, your spouse, or your dependents.

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Changes to itemized deductions. For 2023, the same changes have been made to itemized deductions that can be claimed on Schedule A as in 2018.

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Your itemized deductions are no longer limited if your adjusted gross income is over a certain amount.

You can deduct the part of your medical and dental expenses that is more than 7.5 percent of your adjusted gross income.

Your deduction of state and local income, sales, and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately).

The limit on charitable contributions of cash has increased from 50 percent to 60 percent of your adjusted gross income.

Moving expenses are not deductible unless you are a member of the Armed Forces on active duty.

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Child tax credit. Right now, unless Congress makes last-minute changes, the 2023 child tax credit is worth up to $2,000 per qualifying child. However, the credit is not fully refundable, which means that you cannot receive the entire $2,000 back as a tax refund, even if you have a $0 tax liability and qualify for the full credit amount.

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Additional child tax credit. A portion of the Child Tax Credit is refundable for 2023. This portion is called the Additional Child Tax Credit (ACTC). For 2023, up to $1,600 per child may be refundable.

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Credit for other dependents. The maximum tax credit per qualifying child is $2,000 for children under 17.

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Social security number (SSN) required for child tax credit. Your child must have an SSN issued before the due date of your 2023 return (including extensions) to be claimed as a qualifying child for the child tax credit or additional child tax credit. If your dependent child has an ITIN, but not an SSN, issued before the due date of your 2021 return (including extensions), you may be able to claim the new credit for other dependents for that child.

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