“In this world, nothing is certain except death and taxes.” - Benjamin Franklin
Taxes are rarely an enjoyable topic but by staying aware of critical information helps avoid future headaches. Here’s some information to keep you in the know.
Essential Dates To Know
Here are some critical dates as a taxpayer you must know for 2023:
Note: an extension to file is not an extension to pay. Make sure any tax owed is paid by April 18th to avoid penalties.
Tax Law Updates
When it comes to financial assets and retirement it’s important to keep up to date on information. We’ve summarized changes that come into effect for the 2022 tax year.
Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act. As a result there’s been a number of updates to tax-deferred savings strategies in retirement plans . Some of the major updates include:
Tax rates are set to revert on 1/1/2026 to those in effect under pre-2018 tax law. The new rates will be 10, 15, 25, 28, 33, 35, and 39.6 percent (vs. 10, 12, 22, 24, 32, 35, and 37 percent).
Tax Implication Considerations
Consider contributing to a retirement account. Contributions to retirement accounts like 401(k)s and IRAs are tax-deductible, which means they reduce your taxable income. By contributing to a retirement account, you can lower your tax bill and save for your future at the same time.
2023 Contributions Limits
Take advantage of tax deductions and credits. Tax deductions and credits reduce the amount of tax you owe by reducing your taxable income or providing a direct reduction in your tax bill. There are many deductions and credits available, so it's important to research and see which ones apply to your situation.
Plan for taxes on investment income. Investment income, such as interest, dividends, and capital gains, is subject to tax. By properly planning for taxes on investment income, you can ensure that you're not caught off guard by a large tax bill.
Keep detailed records. Proper record-keeping is essential for tax planning. By keeping detailed records of your income, expenses, and deductions, you can easily calculate your tax bill and take advantage of tax breaks.
By being in the know you can save money and reduce stress when it comes time to file your taxes. Making strategic decisions now so you can maximize your savings and stay financially wise.
This is for informational purposes only and does not serve as personal tax advice. Please speak to a tax representative about your unique situation. At the date of this blog's creation (2/8/23) data represented is considered accurate. Please do your own due diligence to ensure accuracy in the future.
Investment advisory services offered through Cornerstone Wealth Group, LLC dba Cornerstone Wealth, an SEC registered investment adviser.