Tax changes 2023

Now that we've rung in the New Year get ready for changes when it comes to filing your taxes.

Even though it's only January, the IRS says it's not too soon to start preparing your income tax returns.

Anil Melawni is a certified public accountant with  JLD tax & accounting in New York City.

He says, "They are opening up the filing season earlier than usual because they are still very behind with the COVID-19 and they really want to try to catch up from that."

He adds that it is an effort to recognize that inflation has taken a toll on taxpayers so there are also some changes for the tax returns you will file next year.

Melwani said, "They want to motivate people to save more, maybe spend a little less, and just prepare for tougher times ahead. The major change this year for taxes and mostly due to inflation is the change in the bracket. What they did is they raised up all the brackets so that even if you're making the same or a little more money, you're going to pay a lower tax rate at least federally. They've done that. They've increased contribution limits for everything from a 401k to an IRA to an episode to an HSA, flexible account spending, health savings account."

To understand where you fit into this picture the IRS urging you to start getting paperwork for tax filing together early.

The government recognizes that pay checks aren't going as far as they used to due to inflation and that it  might continue well into 2023.