We’re just a couple of months away from the tax filing deadline for individuals, so we asked Meriwether Wilson & Company, PLLC in West Des Moines to share some important tax preparation information for those filing for tax year 2023.

Tax season is back – the time of year that brings both dread and opportunity in equal measure. But fear not! We are about to walk you on a journey of tax preparation armed with savvy strategies and new information. Whether you are a procrastinator or a meticulous organizer, we've got tips and tricks lined up to make this tax season a breeze.

Helpful tips as we approach tax season:

• Watch for 1099s or any other tax documents, as they should be arriving any day if they haven’t already.
  • Be aware that 1099s may not be coming in the mail anymore, and you will need to log in online to your accounts, i.e. brokerage, health savings accounts, etc.
• Look through your prior-year documents to make sure you aren’t missing anything. If your tax preparer sends you an organizer, fill it out and look to see what it’s asking from you.
• Gather your documents and deliver them to your tax preparer as soon as possible.
• Be organized.
• Make your tax preparer aware of any life changes such as:
  • New address
  • Birth or adoption of a child
  • Job change
  • Retirement or plans to retire soon
  • Changes for the upcoming year (2024)
• If you are 72.5 years of age or older, be aware that you need to be taking the required minimum distributions from your retirement accounts to be compliant with legislation. Check in with your financial planning team for guidance.

   

• A few deductions that many people don’t know about:

  • If you are a teacher, you can write off up to $300 worth of out-of-pocket supply costs.
  • Iowa only: Under the Tuition & Textbook Credit, you can claim the cost of your child’s prom dresses, tuxedos and sports clothing. The credit is worth up to 25% of eligible expenses up to $2,000, therefore, the maximum credit allowed is $500.
• Take advantage of accounts with tax benefits:
  • Health savings accounts (HSAs)
  • Contributing to ROTH IRAs
  • Contributing to a 529 College Savings Plans for your children

New for 2023 tax year filing and beyond:

The Inflation Reduction Act of 2022 which was signed into law in August 2022, amended the limits and requirements for the Energy Efficient Home Improvement Credit, Residential Clean Energy Credit, and the Clean Vehicle Tax Credit. Below are the important changes to take note of beginning with the 2023 tax filing year:

• Energy Efficient Home Improvement Credit: This credit covers a variety of “home improvements” ranging from doors and windows to furnaces and water heaters. The lifetime limit of $500 is no more, making way for a $1,200 annual limit. This credit is equal to 30% of qualified expenses, subject to various limits based on the type of property involved.
• Residential Clean Energy Credit: This credit specifically includes things that improve the overall energy efficiency of your home, including solar-related items, wind turbines, battery storage technology, etc. It is another credit equal to 30% of qualified expenses, but (generally) without annual or lifetime limits.
• Clean Vehicle Credits: This credit involves either new or used qualified plug-in or fuel cell electric vehicles. New vehicles are limited to $7,500 if they qualify, and used vehicles are limited to $4,000. This is the only one of the three credits that are subject to AGI limitations. There are numerous other requirements, including MSRP, battery capacity, and weight rating limits. Visit gov to verify eligibility.

When it comes to claiming these tax credits be sure to keep track of expenses, invoices, and any other relevant documentation to aid your tax preparer, if applicable. Also, it is important to ensure you opt for the improvements and upgrades that meet the energy efficiency requirements stipulated in each credit. All credits are subject to various limits based on the types of property installed.

For additional guidance, reference the following links:

Energy Efficient Home Improvement Credit | Internal Revenue Service (irs.gov)

Residential Clean Energy Credit | Internal Revenue Service (irs.gov)

Credits for new clean vehicles purchased in 2023 or after | Internal Revenue Service (irs.gov)

Used Clean Vehicle Credit | Internal Revenue Service (irs.gov)

* Meriwether Wilson & Company, PLLC is a separate entity and not affiliated with Syverson Strege.