Tax Season is Here: Some Useful Tips

Tax Season is upon us. Planning and preparation are extremely important to be able to maximize your deductions and not overpay on your 2023 taxes.  We always aim to provide helpful information to assist you in preparing your 2023 taxes.

The 0% long term capital gains rate for 2023 applies at taxable income up to $44,625 for single filers. If your tax filing status is “Married Filing Joint,” that amount increases to $89,250.  We’ve included a useful charts for you to understand the long-term capital gain rates.

Meanwhile, these are the standard deductions you need to know for 2023

Single or Married Filing Separate                $13,850
Married Filing Jointly                                      $27,700
Head of Household                                          $20,800

Those who are blind or over the age of 65 should understand the following deductions, as well:

Married Filing Jointly or Separate              $1,500
Single or Head of Household                       $1,850

What about mileage rates?  Here’s what you need to know

Business                                                            65.5 cents per mile
Charitable                                                        14.0 cents per mile
Medical                                                              22.0 cents per mile

Tax Deductible IRA Contributions
Under Age 50 Max                                         $6,500
Over Age 50 Max                                            $7,500

2023 IRA Deduction Phaseout Range if covered by an employer plan

Married Filing Jointly                                         $116,000 – 136,000
Single or Head of Household                          $73,000 – 83,000
One Spouse Covered by Employer Plan     $218,000 – 228000

2023 Roth Deduction Phaseout Range
Married Filing Jointly                                       $218,000 – 228,000
Single or Head of Household                        $138,000 – 153,000
Married Filing Separate                                   $0 – 10,000

Long-Term Care Insurance Annual Premium Deduction Limits
Age 41 – 50                                                     $890
Age 51 – 60                                                     $1,790
Age 61 – 70                                                     $4,770
Age 71 +                                                           $5,960

Gift Tax Annual Exclusion

2023                                                                  $17,000
2024                                                                  $18,000

Things to Know for Tax Year 2024:
– The maximum 401K contribution is now $23,000. If you are over age 50, you can make a catchup contribution of another $7,500. These limits also apply to 403B and 457 plans.

– Simple plans have a cap of $16,000 plus a catchup of an additional $3,500 for people over age 50.The 2024 contribution cap for traditional IRA’s and Roth IRA’s us $7,000, plus $1,000 for individuals over age 50. The income ceiling on Roth IRA’s is higher this year. Contributions phase out of adjusted gross income (AGI) of $230,000 to $240,000 for couples. For single, the amounts are $146,000 to $161,000.

– 2024 deduction phases outs for traditional IRA range from adjusted gross income of $123,000 to $143,000 for couples covered by a 401K, and $77,000 to $87,000 for single and head of household filers.

If only one spouse is covered by a plan, the phase out for deducting contributions for the uncovered spouse is $230,000 to $240,000.

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Remember, the sooner you file, the sooner you will receive your refund. Electronic filing is the optimal method for filing. The tax deadline for individual tax returns for this filing season for Massachusetts residents is Tuesday, April 16, 2024.