Tax Season News and Survival Tips

This week, Craig Siminski, of CMS Retirement Income Planning, shares with us an article discussing information, filing tips, and last-minute opportunities for tax savings:

It’s not easy to keep up with complex tax laws that always seem to be changing, much less figure out how they might affect you personally. Even so, it’s important to consider the potential impact of taxes when making many types of financial decisions.

The IRS automatically adjusts the standard deduction and income tax brackets annually for inflation. The rate of inflation rose to 40-year highs in 2022, so the 7% increases for 2023 are the largest since these adjustments began in 1985.

The standard deduction is $13,850 for single filers in 2023 (up $900 from 2022) and $27,700 for married joint filers (up $1,800).

The filing deadline for 2023 federal income tax returns is April 15, 2024, (April 17 in Maine and Massachusetts, due to local holidays). Even though the 2024 tax year is well underway, there may still be time to take steps that lower your tax liability for 2023.

Understand “Marginal” Tax Rates

U.S. tax rates increase at progressively higher income levels or brackets (see table). If your taxable income goes up and moves you into a higher bracket, the resulting tax increase might not be as bad as it may appear at first glance.

 For example, if you and your spouse are filing jointly for 2023 and have a taxable income of $110,000, you are in the 22% tax bracket. However, you will not…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 25 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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