Alliance Tax Recommends all Clients Create an Individual IRS Online Account
Setting up an IRS online account has many benefits. You can securely access and view your IRS tax information anytime through the individual online account. You have the option to: |
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Review Federal estimated payments made during the year or refunds applied as a credit.. |
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Review Federal amounts owed for past tax years. Payment history. Payment plan details. |
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Print digital copies of IRS notices. |
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Request Federal tax records/tax transcripts.
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Schedule Federal payments.
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To create an IRS online account, each individual taxpayer needs to visit:
https://www.irs.gov/payments/view-your-tax-account
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2023 Standard Deduction Amounts
Setting up an IRS online account has many benefits. You can securely access and view your IRS tax information anytime through the individual online account. You have the option to:
For 2023, the standard deduction amount has increased for all filers, and the amounts are as follows: |
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$13,850 Single or Married filing separately |
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$27,700 Married filing jointly or Qualifying surviving spouse |
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$20,800 Head of household |
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| Taxpayers who are at least 65 years old or blind can claim an additional 2023 standard deduction of $1,500 ($1,850 if using Single or Head of household filing status) for each taxpayer on a Married filing jointly return, and each taxpayer who is blind. |
Charitable Donations
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| For 2023, IRA owners who are age 70 ½ or older had the option to transfer up to $100,000 to a charity tax free by making a Qualified Charitable Distribution, or QCD. This amount will increase to $105,000 in 2024. QCDs must be made directly by the trustee of the IRA to the charity in order to qualify for tax-free treatment, and must be made by December 31, so the IRA owner should contact their IRA trustee in time to complete the transaction by the end of the year. All other charitable donations must be claimed as a deduction on Schedule A. |
| 2023 Standard Mileage Rates |
With the soaring gas prices during the first part of 2022, the IRS increased the standard mileage rate set
for 2022 for mileage driving after July 1, 2022. For those that qualify for a mileage adjustment to there
income, please provide your mileage total separated for January 1 through June 20 and for July 1
through December 31st.
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| | Rates January 1 through June 30
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65.5 cents per mile for business use |
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22 cents per mile driven for medical purposes |
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14 cents per mile driven in service of charitable organizations |
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| Digital Assets/Virtual Currency/Cryptocurrency |
The IRS treats virtual currencies as property, meaning it is taxed in a manner similar to stocks or real property. The IRS is focusing on cryptocurrency/digital asset tax evasion with virtual currencies, employing data analytics to uncover transactions that crypto users assumed were hidden. Form 1040 asks whether at any time during 2023, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?
If the answer is Yes, you must provide a record of all your transactions. This includes how much you paid for the digital asset, if purchased, how long you held the asset, and how much you sold it for. You must have receipts for each transaction. More information may be required to complete your 2023 tax return.
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| Form 1099-K |
| If you received payments through apps like Venmo, PayPal, or Cash App in 2023, you may receive Form 1099-K in early 2024. The IRS has recently announced another postponement of the implementation of the $600 reporting threshold, so for 2023, the rules will remain as in the previous year. A 1099-K will only be issued if a taxpayer has over $20,000 in payments and more than 200 transactions during 2023. For 2024, the IRS is planning for a decreased threshold of $5,000 as part of a phase-in of the new rules which were enacted under the American Rescue Plan. The $600 threshold will take effect in 2025. |
| Retirement Savings |
For 2023, the limit on annual contributions to an IRA was increased to $6,500 and the catch-up contribution limit remains at $1,000 for individuals age 50 or older. For 2024, the annual contribution limit will increase to $7,000 and the catch-up contribution limit will stay at $1,000. The elective salary deferral limit for employees who contribute to a retirement savings plan like a 401(k) will increase from $22,500 in 2023 to $23,000 in 2024, with catch-up contribution dollar limit of $7,500 for employees who are age 50 or older.
Individuals who reached the age of 72 during 2022 were required to begin taking required minimum distributions in 2023. The first RMD was due by April 1, 2023, and the second RMD is due on December 31, 2023. The Secure 2.0 Act of 2022 increased the RMD age to 73, so individuals who turned 72 in 2023 will not have an RMD due until April 1, 2025 ( or the year following the year in which you reach the age of 73). Under the provisions of the Secure 2.0 Act, the penalty for failing to take the full amount of the RMD by the due date has been reduced from 50% of the required undistributed amount, to 25%, and if the RMD is corrected within 2 years, the penalty is further reduced to 10%. Form 5329 must be filed with their federal tax return for the year in which the full amount of the RMD was required, but not taken.
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| Energy Related Credits |
| | Energy Efficient Home Improvement Credit
These expenses may qualify if they meet requirements detailed on energy.gov:
Exterior doors, windows, skylights and insulation materials
Central air conditioners, water heaters, furnaces, boilers and heat pumps
Biomass stoves and boilers
Home energy audits
The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
2022: 30%, up to a lifetime maximum of $500
2023 through 2032: 30%, up to a maximum of $1,200 (heat pumps, biomass stoves and boilers have a separate annual credit limit of $2,000), no lifetime limit
https://www.irs.gov/credits-deductions/home-energy-tax-credits
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| Residential Clean Energy Credit |
| | These expenses may qualify if they meet requirements detailed on energy.gov:
Solar, wind and geothermal power generation
Solar water heaters
Fuel cells
Battery storage (beginning in 2023)
The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
2022 to 2032: 30%, no annual maximum or lifetime limit
2033: 26%, no annual maximum or lifetime limit
2034: 22%, no annual maximum or lifetime limit
https://www.irs.gov/credits-deductions/home-energy-tax-credits
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| Credits for new clean vehicles purchased in 2023 or after |
| | If you place in service a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit.
At the time of sale, a seller must give you information about your vehicle's qualifications. Sellers must also register online and report the same information to the IRS. If they don't, your vehicle won't be eligible for the credit.
You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
The credit is available to individuals and their businesses.
To qualify, you must:
Buy it for your own use, not for resale
Use it primarily in the U.S.
In addition, your modified adjusted gross income (AGI) may not exceed:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
The amount of the credit depends on when you placed the vehicle in service (took delivery), regardless of purchase date.
For vehicles placed in service January 1 to April 17, 2023:
$2,500 base amount
Plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity
Plus $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours
Up to $7,500 total
In general, the minimum credit will be $3,751 ($2,500 + 3 times $417), the credit amount for a vehicle with the minimum 7 kilowatt hours of battery capacity.
For vehicles placed in service April 18, 2023 and after:
Vehicles will have to meet all of the same criteria listed above, plus meet new critical mineral and battery component requirements for a credit up to:
$3,750 if the vehicle meets the critical minerals requirement only
$3,750 if the vehicle meets the battery components requirement only
$7,500 if the vehicle meets both
A vehicle that doesn't meet either requirement will not be eligible for a credit.
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after
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| Missouri Standard Deduction Amounts |
| | For 2023, the standard deduction amounts allowed by Missouri match the increased Federal standard deduction amounts:
- $13,850 Single or Married filing separate
- $27,700 Married filing combined or Qualified Widow(er)
- $20,800 Head of household
Additional standard deduction amounts for age 65 or older and blind:
$1,500 for each occurrence on a Married filing jointly, Married filing separately,
or Qualifying surviving spouse return: or
$1,850 for Single or Head of household filing statuses.
2023 Missouri Inactive Duty Military Tax Deduction
- 80% of military income for 2023
- 100% of military income for 2024
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| 2023 Missouri Other Changes |
| | | - | 20% Business Income Subtraction (increase from 15% in 2022) | | - | Missouri Working Family Credit, new in 2023, credit up to 10% of federal earned income credit. This cannot be refunded but can reduce tax owed. | | - | Missouri Public Pension Exemption | | - | Depending on a variety of factors, you may be able to deduct up to 100% of your public retirement benefits received from PSRS or PEERS on your Missouri income tax return. | | - | The total public pension exemption is limited to the maximum Social Security benefit of each spouse. | | - | In order to be eligible for the full deduction, your Missouri adjusted gross income must fall within certain income limitations. If your income exceeds the limitation, you may qualify for a partial exemption. The amount of your exemption must be reduced by the amount that your income exceeds the limitation. The limitation is based on your filing status and income (less taxable social security benefits) as listed below: | | - | $100,000 - Married, filing combined | | - | $85,000 - Married, filing separate | | - | $85,000 - Single, Head of Household, or Qualifying Widow(er) |
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