Tax Tips!

We have been giving our clients Tax Tips for years. Here you will find a few of our favorites!

The Child Tax credit has changed FY23

The Child Tax Credit (CTC) has reverted to the 2019 rates. If you got $3600 for an eligible dependent in 2022, you can only get up to $2000 for an eligible dependent in 2023. The Child and Dependent Care Credit has also reverted to a maximum of $2100, not the $8000 maximum from 2022. (This change is still pending approval)

Get your End of Year Child Care Bill

Most places that provide child care should know that you have a right to request an end of the year bill for their services. This bill should include the amount you paid throughout the year and their Tax ID number on it so you can file Form 2441. This could be an important credit you might miss if you don't have that information.

Adjust your W4

Your W4 tells your employer how much to deduct on your earnings for taxes. The highest deduction is claiming single and 0, but did you know you if you are married, you can still claim a higher deduction on your W4?

Choose the option "Married, but withhold at the higher Single rate" on your W4 and your employers will hold pay a larger sum in taxes throughout the year, which could mean a better refund when you file. 

Track your Miles

If you operate a small business, you can use apps to help track your business miles throughout the year. All trips you make for business reasons should be tracked and totaled to ensure you are claiming the miles for your business. 

Jason uses an app called Stride to track his miles. You can use his referral link to try it too, it is free!

 https://stride.app.link/DWGGSTnwFdb (this is an affiliate link and Jason will get a referral bonus if you click it and sign up, full disclosure)

Keep track of your Out of Pocket Medical expenses

Another thing that we encourage all of our clients to do is track their out of pocket medical expenses for the year. This includes Co-Pays, Prescriptions, Costs for Vision, Dental costs, Specialists, and others.

A simple spreadsheet or Google Sheet will let you keep track throughout the year and you can use the SUM function to get a total for the year.

Long-term is Different than Short-term Capital Gains

With many people interested in the stock market, it helps to remember that there is a difference between a long-term and short-term capital gain tax. 

Any assets that are held for a year or longer are subject to Long-Term capital gains tax on any profits. That means there is a threshold limit based on your filing status and Income. Your Short-term capital gains are taxed as income in your current tax bracket. You should always check with any investment firms about collecting your tax documents and getting them to your tax preparer to ensure everything is accounted for!