The Hartford Courant
The 2023 Tax Season is in full swing and which means taxpayers have a lot of questions on what’s new this 12 months. The submitting deadline is April 18 this 12 months.
We requested Andrew Lattimer, the managing principal of CLA’s (CliftonLarsonAllen) Connecticut workplaces for some assist with tax questions. His workplaces consisting of roughly 300 people in West Hartford, Marlborough, and Shelton. Over the previous two years Andrew has helped his shoppers with the Payroll Protection Program in addition to help with the Employee Retention Credits.
Andrew has expertise with tax planning, analysis, and advising shoppers in a wide range of industries together with auto dealerships, aerospace, manufacturing, hospitality, shopper merchandise, actual property, building, expertise service suppliers, and healthcare, in addition to personal fairness funds. He makes a speciality of federal and state tax returns for people, partnerships, and privately held companies. Andrew additionally has vital expertise with home and multinational firms, in addition to S and C companies. As a guide, he performs money circulate and liquidation evaluation and has expertise in analysis and improvement credit, mergers, acquisitions, and worldwide taxes.
Andrew will weigh in right here on winnings from sports activities betting and different prime tax questions.
Questions:
The Super Bowl 2023 is developing Feb. 12 and hundreds of thousands of Americans will guess on the sport that includes the Philadelphia Eagles and the Kansas City Chiefs.
Are playing winnings taxable and what do taxpayers have to know?
Yes, playing winnings are absolutely taxable and you should report the revenue in your tax return. Gambling revenue contains, however isn’t restricted to, winnings from lotteries, raffles, horse races, and casinos. It contains money winnings and the honest market worth of prizes, similar to automobiles and journeys.
A payer could also be required to difficulty you a W-2G, You should report all playing winnings on Form 1040 (use Schedule 1 (Form 1040)PDF), together with winnings that aren’t reported on a Form W-2G.
Can any playing losses be written off?
For federal functions you might deduct playing losses provided that you itemize your deductions on Schedule A and stored a document of your winnings and losses. The quantity of losses you deduct can’t be greater than the quantity of playing revenue you reported in your return. Claim your playing losses as much as the quantity of winnings, as “Other Itemized Deductions.”
What particular steps do taxpayers should take to jot down off playing losses?
If the taxpayer retains a document of their winnings and losses, they will deduct the losses to the extent of the winnings on their federal return as an itemized deduction on Schedule A. If the taxpayer doesn’t itemize, then the losses is not going to be deductible.
For the overall tax season what are the highest adjustments taxpayers ought to learn about this 12 months?
The largest change is that R&D Expenditures for companies in 2022 should be capitalized and brought over 5 years.
In 2022 the Child and Dependent Care Credit is non-refundable. The most credit score share additionally drops from 50% to 35%. Fewer care bills are eligible for the credit score, too. For 2022, the credit score is simply allowed for as much as $3,000 in bills for one youngster/dependent and $6,000 for a couple of. When the 35% most credit score share is utilized, that places the highest credit score for the 2022 tax 12 months at $1,050 (35% of $3,000) you probably have only one youngster/dependent in your loved ones and $2,100 (35% of $6,000) you probably have extra. In addition, the total youngster and dependent care credit score will solely be allowed for households making lower than $15,000 a 12 months in 2022 (as an alternative of $125,000 per 12 months).
Additional areas embody the Solar Tax Credit and Electric Vehicle Credits. For these to whom this is applicable, they shouldn’t neglect to take them.
Lastly, the retirement age for folks to should take their Required Minimum Distribution has modified from 72 to 73 staring in 2023. People want to pay attention to this and modify accordingly.
What are the largest errors taxpayers make in submitting and the way do they keep away from them?
One mistake folks nonetheless make shouldn’t be selecting direct deposit for his or her refunds. Refunds have taken longer to get previously few years by requesting a examine—they will get refunds sooner by selecting the direct deposit avenue.
People additionally are inclined to neglect about non-cash charitable contributions similar to clothes and meals. They must be aware of those.
There can also be the utilization of Health Savings Accounts, Flexible Savings Accounts and Dependent Care Expenses. People who use these ought to look into potential tax advantages.
What recommendation would you give to taxpayers to ensure they get refunds in a well timed approach?
The largest and easiest recommendation I may give is to file electronically and have refunds direct deposited. It will save time and lead to returns being processed faster and refunds being acquired faster.
Source: www.bostonherald.com”