Tax Tips

The tax laws change frequently. We want to provide you with tax help and resources to make the process easier to understand. That’s why we’ve prepared a list of tax tips we hope you will find useful!

If you don’t find answers to your questions, please give us a call at (317) 897-9964 or contact us online. One of our tax professionals will be happy to assist you!

Download the full PDF.

Tips for Filing Your 2023 Taxes

The tax code is complicated and can change dramatically.
Please consult your tax professional for expert advice.

The tax code is complicated and can change dramatically.
Please consult your tax professional for expert advice.

1) Received a Letter from IRS or Indiana?

• From simple issues to tax audit help, our tax advisors will meet with you in person or virtually to help relieve any stress.
• The IRS will receive an additional $80 billion over the next decade enabling it to add thousands of new employees, upgrade operations and increase the number of audits.

2) Indiana Taxpayers Only

• Do you know anyone (including Grandparents) that are saving or paying for College Expenses or Private School K-12 Tuition?
  Contribute to the Indiana College Choice Direct Savings Plan and increase your Indiana refund by as much as $1,500 each year. Ask us for details.
• Don’t forget, Indiana allows you to deduct the first $3,000 you paid in rent and the first $2,500 of property taxes.

3) New 30% Energy Tax Credit

• The credit is up to $1,200 for the purchase of high efficiency: furnaces, air conditioners, hot water heaters, exterior doors, windows (including skylights), insulation, home energy audits, and electric vehicle chargers.
• The credit is up t $2,000 for heat pumps and solar water heating.
• The products must have the ENERGY STAR label to qualify.
• The credit has no lifetime dollar limit and you can claim it every year until 2033.
• The credit is nonrefundable, meaning you can’t get back more than you owe in taxes.

4) Standard Deduction vs. Itemized Deductions

• Itemized deductions must exceed the standard deductions of $27,700 for Joint Returns, $20,800 for Head of Household, and $13,850 for Single taxpayers.
• You might benefit from itemizing if you had large, out-of-pocket medical expenses, or paid mortgage and real estate taxes on your home.

5) Child and Other Dependent Tax Credit

• The child tax credit has reverted to previous rules, for a total of $2,000 per child under age 17.
• The other dependent credit of $500 can be claimed for all dependents age 17 and above – same as last year.

6) ROTH vs. Traditional IRA: Which is Better for You?

ROTH IRAs tend to get a lot of hype, and for good reason, because you pay the taxes upfront and your eventual withdrawals are completely tax-free.

Traditional IRAs give you a tax break now and, in many situations, will put more money in your pocket than a ROTH would.

The tradeoff is an uncertain future tax liability possibly even decades from now. Given enough time and/or a high rate of return, you may be better off with a ROTH.

7) Childcare Expenses – Credit

• The amount of credit you can claim is a percentage (20% to 35%) of the child care expenses you paid a daycare provider up to a maximum of $3,000 for one child, or $6,000 for two or more children. This credit will directly increase your tax refund dollar for dollar.
• The Dependent Care Flexible Spending Account allows your employer to contribute up to $5,000. The money put into the account can be taken out tax-free.

 8) Earned Income Credit (EIC)

The Earned Income Credit was passed in 1975 in an effort to reduce poverty and assist those who work to provide for their families but earn lower income levels. The credit decreases the amount of tax you owe and the credit is refundable. The 2023 maximum credit is:

–  $7,430 for three children       –  $6,604 for two children

–  $3,995 for one child                –  $   600 for no children

–  Also, the Indiana maximum credit is $575

9) Education Credits

The American Opportunity Credit can increase your refund by up to $2,500 per student. Also, you could qualify for a $1,000 refund even if you had zero income, but you cannot claim it if you could be a dependent of your parents. The tax break is allowed the year you pay the tuition even if you used a student loan to pay for it. Form 1098T is required.

10) Student Loans

• The deduction for Student Loan Interest can ease the burden of payments for student loans. If you pay interest on a qualified Student Loan, you are generally able to deduct the interest expense up to $2,500.

11) Teachers

There is a $300 deduction for teachers using their own money to pay for classroom supplies for 2023.

12)Make the RMD from Your Traditional IRS Tax-Free

• The tax code allows you to donate directly from your IRA account up to $100,000 per year in Qualified Charitable Deductions (QCDs).
• The QCD donated money escapes Federal income taxes and will also lower your Indiana and county taxes by over 5% of the contributed amount.
• Double-Dip. You get a double-dip when you don’t itemize deductions. The non-itemizing taxpayer creates a deduction where none existed before.
• Other benefits may include: Lower Medicare premiums and lower tax on your Social Security benefits.

13) Business Deductions for Sole Proprietorship, S Corporations, Partnerships and, Rental Income

• Qualified Business Deduction (QBD). Generally you can deduct 20% of profit from your income.
• Standard Mileage Rates. The 2023 rate for business use of your vehicle is 65.5¢. It’s extremely important to have a mileage log or all deductions could be disallowed.
• Here’s good news for business meals. If, for business reasons, you take a customer to breakfast, lunch or dinner at a restaurant or hotel – even though you do not discuss business – the law allows you to deduct the expenses for meals and beverages to the extent they are ordinary and necessary expenses. You need to keep records that prove the expenses and shows the name of the person you had meals with and a short note of seven words or less. Tip: record on monthly charges card statements.

14) Scams to Look Out For

• IRS letters and notices are only sent to you by mail through the United States Postal Service (USPS).
• Do not respond to requests for personal or financial information you may receive via email, social media, phone calls or text messages.
• Don’t give out any information to anyone who calls you demanding immediate payment of your tax bill. These scammers pretend to work for the IRS and often even use fake IRS identification numbers.

Need a Copy of Your Tax Return?

The Internal Revenue Service charges $50 for a complete copy of your tax return. However, Fiscal Tax retains our client returns for 10 years and we are available year-round to provide FREE copies whenever you should need them.

Download the full PDF.