Changes to watch for as 2023 tax season begins
LINCOLN, Neb. (KLKN) – Monday marks the first day of the 2023 tax season, and it comes with changes.
The pandemic affected the previous years, so there are things you should know as you prepare to file.
More than 168 million individual tax returns are expected to be filed, with most coming in before the deadline in April.
Taxpayers requesting an extension will have until Oct. 16 to file, but there is more that experts like Zach Bryant of Bryant and Associates say to take note of as you gather your papers this year.
“The biggest changes are that there will not be the advance on child tax credit payments, there’s not going to be any stimulus payments that people receive and also, there’s not going to be tax-free unemployment income,” Bryant said.
That unemployment income, including what was tax-free up to a certain amount for some, is now taxable.
To make the filing process easier, experts say to know which income is taxable.
It is a taxpayer’s responsibility to report the correct amount to avoid processing delays, including money received through popular mediums like PayPal and Venmo.
Despite what you may have heard, Bryant said you don’t need to report every PayPal transaction.
But if you are getting paid for your services in this way, then it’s considered taxable, and you must report it.
“People that received payments for that, there’s been talk that they’re going to receive a 1099 if they’ve received over $600 of what is considered income,” Bryant said. “However, if they’re getting, let’s say they go out to a dinner with friends and they’re splitting the bill, and someone’s reimbursing them through Venmo or PayPal, that’s not considered taxable income.”
Business owners can still get credit for employees, but previous pandemic loans and grants that were available are now done.
“There is one still available for business owners for the employee retention credits – up to $26,000 of credit per employee that can be applied for,” he said. ‘That application period does run out, depending on the year that they qualify for, in either 2024 or 2025, so there’s still time to apply for that.”
Most refunds will be issued in less than 21 days, especially if you file electronically.
And April 15 is known as the usual tax deadline, but you will have three extra days this time around.
With the 15th falling on a Saturday and Washington D.C.’s Emancipation Day holiday on Monday, the deadline will be pushed back to Tuesday, April 18, this year.