IMPORTANT TAX RETURN INFORMATION - Printable Version +- My Northern Wisconsin (https://www.mynorthernwisconsin.com/news) +-- Category: General Interest (https://www.mynorthernwisconsin.com/news/forum-1.html) +--- Category: State, National, & World News (https://www.mynorthernwisconsin.com/news/forum-4.html) +--- Topic: IMPORTANT TAX RETURN INFORMATION (/thread-458.html) |
IMPORTANT TAX RETURN INFORMATION - My Northern Wisconsin - 02-26-2024 Davette Lynne Hrabak, CPA discusses rates, exemptions, and limits; education grants; standard deductions; and Health Savings Accounts. Each section is in bold for ease of finding the information you may need. For a free, no obligation quote, call Davette at 715-339-6638. Her office is located between the lion statues at 164 South Lake Avenue in Phillips. By: Davette Lynne Hrabak, CPA, CFE, CBM, ATA, ATP, ABA, ECS, CGMA “When it comes to taxes, save the lion’s share; enter between the lions to get this special care.” https://www.DavetteLynneHrabak.com 2023 TAX YEAR QUICK TAX FACTS - RATES, EXEMPTIONS, AND LIMITS Each year the IRS releases and revises various rates, exemptions, and limits, some of which are listed below: Standard mileage rates are available to taxpayers in certain situations. The current rates for the filing of your 2023 income tax return are as follows: Business Standard Mileage Rate: 65.5 cents per mile Medical and Moving Standard Mileage Rate: 22 cents per mile Charitable Standard Mileage Rate: 14 cents per mile Gift Tax Annual Exclusion: $17,000 Each person’s tax situation is unique. Sometimes the only deduction available is a standard rate and other times the taxpayer has an option to choose to use standard rates or actual amounts. The circumstances of which is most appropriate to use must be looked at on a case-by-case basis for each taxpayer; rarely are any two taxpayers’ situations identical. 2023 STUDENT EDUCATIONAL GRANTS CAN BE TAXABLE Many taxpayers are surprised to learn that some of the money that their children receive from scholarships and grants may be taxable. It is true that there is a Scholarship and Fellowship Exclusion; however, this is only a partial exclusion based on how the funds are used, and, in order to qualify for that exclusion, the person must be a degree candidate. The degree candidate must also be a primary or secondary school student, a college undergraduate or graduate student, or a part-time or full-time student at an accredited educational institution that provides a program that is acceptable for full credit towards a bachelor’s or higher degree. The program that the school offers must be a program of training to prepare students for gainful employment in a recognized occupation. If the person is not a degree candidate, all amounts received are generally taxable. If the person is a degree candidate, then only amounts used on tuition fees, books, supplies, and equipment are tax-free. Any amounts spent on room & board and travel are taxable. This, at times, causes some confusion among many taxpayers and can result in some students inadvertently doing their tax returns incorrectly. Scholarships and fellowships include items such as Pell Grants and other Title IV Grants that are need-based education grants. There are, however, additional exceptions to this, including if the scholarship or grant was provided by a tribe subject to the Tribal General Welfare Act. STANDARD DEDUCTIONS Almost every year there are changes to the amounts for the standard deduction. As you probably know, if you do not itemize a tax return, you are entitled to take a standard deduction. If you are able to itemize, and if your itemized deduction is higher than your standard deduction, then you take your itemized deduction. The standard deductions for this year are: Married Filing Joint or Qualified Widow or Widower Filing Status: $27,700 Single Filing Status: $13,850 Head of Household Filing Status: $20,800 Married Filing Separately Filing Status: $13,850 Dependent Filing Status: $1,250 HEALTH SAVINGS ACCOUNTS (HSAs) You may have heard about Health Savings Accounts. They are a savings account that is set up and used exclusively for paying for qualified medical expenses for the account beneficiary and/or dependents and/or spouse of the beneficiary. They are a valuable tool to help assist in the costs of individual and family health care. If you qualify for a Health Savings Account, there are differences in limitations based on self-only or family coverage. For 2023, some of the limitation cut-offs are as follows: For Self-only Coverage: Contribution (deduction) limit: $3,850 Plan minimum deductible: $1,500 Plan out-of-pocket limit: $7,500 For Family Coverage: Contribution (deduction) limit: $7,750 Plan minimum deductible: $3,000 Plan out-of-pocket limit: $15,000 There is an annual contribution amount increase of $1,000 for anyone who is age 55 or older. Remember, if you have already filed but realize that you could have had a credit or deduction that you missed, it is not too late; you can always amend your return. If you need more information or believe you could qualify for them, I would be happy to give you a free quote on the preparation of your return. When the right tax and financial advice is essential, talk to someone with an unmatched level of knowledge, experience, and education. A CPA understands the business of taxes and finance and can provide trusted advice and services during the tax season and throughout the calendar year. You can share this article on Facebook at this link. Davette Lynne Hrabak, CPA, located at 164 South Lake Avenue in Phillips, specializes in tax return preparation, business start-up services, consulting, bookkeeping, payroll, and all your accounting needs. Call <a href="tel:715-339-6638">715-339-6638</a> or visit <u><a href="https://www.DavetteLynneHrabak.com" target="_blank">Davette's website</a></u>. Follow her <u><a href="https://www.facebook.com/davettelynnehrabak" target="_blank">Facebook page</a></u>. |