Welcome back to Neds Blog Spot, where you can find all your tax tips and tricks from your favorite tax preparers! Our tax deadline is quickly approaching, and we want to make sure we provide you with all the information we can, for your filing to be as quick and painless as possible. Keep reading for some changes we’ve just learned about.
First, reporting rules for Form 1099-K have changed. You should have received a Form 1099-K, Payment Card, and Third-Party Network Transactions by January 31, 2023, if you received payments exceeding $600 for tax year 2023. The taxability of income will not change; all income is still taxable. Be cautious, especially “early filers,” to have your key income documents before submitting your tax return, to avoid having to file an amendment. Additionally, if anything on your 1099-K is incorrect, taxpayers should contact the payer immediately. The payer will be in the top left-hand corner of the form. Please understand, the IRS cannot correct information on this form.
Next, let’s look at some changes that are happening to credits. There are some tax credit rates that have returned to 2019 levels. Unfortunately, this means affected taxpayers will more than likely receive a smaller refund compared to the previous tax year. The changes are happening to the Child Tax Credit, Earned Income Tax Credit, and Child & Dependent Care Credit and they are as follows:
• Those who got $3,600 per dependent in 2021 will get $2,000 for the 2023 tax year
• For the EITC (Earned Income Tax Credit), eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2023
• The Child and Dependent Care Credit returns to a maximum of $2,100 in 2023 instead of $8,000 in 2022
AVOID REFUND DELAYS
Many different factors can affect the timing of a refund after the IRS receives a return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving federal tax returns by a certain date, especially when making major purchases or paying bills. Some returns require additional review and will take longer to process. Other reasons your refund could be delayed are, but not limited to: the IRS system could detect a possible error, the return is missing information or there is a suspicion of fraud or theft.
Additionally, the IRS cannot issue refunds for people claiming Earned Income Credit or Additional Child Tax Credit before the middle of February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC.
We hope you find this information helpful as you begin to prepare for the upcoming tax season. You can find additional information related to the topics above here: https://www.irs.gov/newsroom/get-ready-for-taxes-whats-new-and-what-to-consider-when-filing-in-2023. If you have any questions, the information for our downtown office will be listed below and don’t forget to check back for more!
Ned Jackson Downtown Office
255 N Liberty Street
Jacksonville, FL 32202