Tax season is fast approaching and millions of Americans will be thinking about filing a 2023 tax return.
For many people, tax season can be daunting and bring questions about deadlines and deductions.
Taxpayers may be wondering how early – or late – they can file their taxes this year or whether there have been changes to income tax brackets.
Since tax season last year, the Internal Revenue Service (IRS) has made some changes to credits and deductions. Therefore, it's important to stay on top of things so you know what you might qualify for.
Here we answer the most pressing questions about the upcoming tax season.
For many people, tax season can be daunting and bring questions about deadlines and deductions
When is the tax deadline this year?
Tax Day is April 15th. It is the same date every year unless it falls on a weekend or holiday.
This year the date falls on a Monday.
When is the earliest I can file my 2023 taxes?
Typically, taxpayers can begin filing taxes at the end of January. Last year, the IRS began accepting returns on January 23rd.
There is no date set yet for people to file their 2023 tax returns, but it is expected to be January 23 or 24.
Some experts suggest that Americans should wait to file taxes until closer to the deadline because they could take advantage of some last-minute tax breaks being negotiated in Congress.
What are the new income tax brackets?
Income tax brackets rose 7 percent for 2023, reflecting 40-year high inflation rates last year.
Income tax in the US is progressive – meaning the more you earn, the more you end up paying as a percentage of your income.
Here are the tax brackets for the 2023 tax year:
For individual applicants:
- 37 percent for income over $578,125
- 35 percent for income over $231,250
- 32 percent for income over $182,100
- 24 percent for income over $95,375
- 22 percent for income over $44,725
- 12 percent for income over $11,000
- 10 percent for income under $11,000
For married couples filing jointly:
- 37 percent for income over $693,750
- 35 percent for income over $462,500
- 32 percent for income over $364,200
- 24 percent for income over $190,750
- 22 percent for income over $89,450
- 12 percent for income over $22,000
- 10 percent for income under $22,000
The income tax brackets will be raised again for the 2024 tax year.
The IRS increased income tax brackets by 7 percent for 2023, reflecting 40-year-high inflation rates the previous year
What is the new standard deduction for this year?
The flat-rate deduction for the 2023 tax year also increased by around 7 percent. It is $13,850 for single applicants and $27,700 for married co-applicants.
Taxpayers claim the standard deduction to reduce their income by a set amount.
Some taxpayers choose to itemize their deductions if the total is more than the standard deduction.
How much is the additional standard deduction for people over 65?
For tax year 2023, Americans who are over 65 or blind and meet certain criteria set by the IRS are now eligible for an additional standard deduction.
The additional standard deduction is $1,850 for single filers or those filing as heads of household and $3,000 for married couples filing jointly if each spouse is over 65. This brings the total amount to $15,700 for single filers and $30,700 for married couples.
Are there any changes to itemized deductions for the 2023 tax year?
According to Charles Schwab, quoted by USA Today, itemized deductions will remain “largely the same” for the 2023 tax year.
The financial services company points out that these itemized deductions remain:
- State and Local Taxes: The deduction for state and local income taxes, property taxes and real estate taxes is limited to $10,000.
- Mortgage interest deduction: Americans can typically deduct interest on the first $750,000 of mortgage debt. However, anyone who purchased a home before December 16, 2017 can deduct interest on the first $1 million.
- Medical expenses: In 2023, only medical expenses that exceed 7.5 percent of adjusted gross income can be deducted.
- Charitable donations: In 2023, the annual income tax deduction limit for gifts to charitable organizations is 30 percent of adjusted gross income for gifts of tangible property—if held for more than one year—and 60 percent of adjusted gross income for cash contributions.
Am I eligible for free tax preparation from the IRS?
Select taxpayers in certain states can prepare and file their taxes directly with the IRS this year through the Direct File Pilot Program.
The pilot is currently open to eligible taxpayers in 12 states – Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
The agency said qualified Americans also must report certain types of income, credits and deductions.
“Initially, the Direct File Pilot will only be open to a small group of taxpayers, then later in the filing season we will open the Direct File Pilot to more people to file their 2023 tax returns,” the IRS website says .
Tax Day is April 15th. It is the same date every year unless it falls on a weekend or holiday
What are the IRA and 401(K) contribution limits?
Employees enrolled in company retirement plans were able to contribute $22,500 to their 401(K) accounts in tax year 2023, and those with an individual retirement account were able to contribute up to $6,500.
Higher limits apply for those aged 50 and over – and the limits increase to $23,000 and $7,000 for the 2024 tax year.
What is the income limit for the child allowance?
The child tax credit pays up to $2,000 for each eligible child under age 17. Up to $1,600 of the withdrawal will be refunded for 2023 taxes.
According to the National Conference of State Legislatures, about 14 states also offer their own child tax credit.
The credit decreases if your modified adjusted gross income exceeds $200,000, or $400,000 for a married couple filing jointly.
A bipartisan group of lawmakers are reportedly working to expand the child tax credit before it's time to file taxes this season, according to Business Insider.
How can I estimate my tax refund – and how quickly can I expect a refund?
Tax return companies TurboTax and H&R Block offer tax refund estimators, as well as nonprofit AARP.
According to the IRS, most refunds are issued within 21 calendar days. Paper check returns can take longer – four weeks or more.