Which states cut their income tax rate for 2023?
- Idaho: dropped to a flat 5.8% from the top marginal rate of 6%
- Indiana: flat rate trimmed to 3.15% from 3.23%
- Iowa: nine individual income tax rates consolidated into four, and the top rate will decrease to 6% from 8.53%
- Kentucky: dropped to 4.5% from 5%
- Arizona: went to a flat 2.5% from a two-bracket structure with rates of 2.55% and 2.98%
- Michigan: dropped to 4.05% from 4.25%
- Missouri: top marginal rate cut to 4.95% from 5.3%, and the amount of income that's exempt from individual income tax rates will increase to $1,000 from $100
- Nebraska: top marginal rate decreased to 6.64% from 6.84%
- New York: rate on income between $13,901 and $80,650 (single filers) and between $27,901 and $161,550 (joint filers) fell to 5.5% from 5.85%; rate on income between $80,651and $215,400 (single filers) and between $161,500 and $323,200 (joint filers) dropped to 6% percent from 6.25%
- North Carolina: flat tax declined to 4.75% from 4.99%
- Utah: flat rate dropped to 4.65% from 4.85%
- West Virginia: top marginal rate fell to 5.12% from 6.5%
** 1099K - More taxpayers to receive 1099K forms. How will this affect you? - (UPDATE) **
Last year for the 2022 tax year, the IRS planned to reduce the reporting threshold for the 1099-K drastically. At the time this form was only issued for payments that exceeded $20,000 and 200 transactions. Under the American Rescue Plan, this threshold was to be reduced to $600 regardless of the number of transactions.
Until November 30, 2023, this was the plan. However, the IRS then issued a notice stating that, once again, the implementation of this new reporting threshold would be put on hold.
Here is what the IRS has provided as a final verdict on Form 1099-K reporting for Tax Year 2023:
The original threshold of $20,000 for 200 or more transactions will remain in place for the 2023 tax year, there will be no effects on 1099-Ks filed this January.
In 2024, the threshold will be reduced from $20,000 to $5,000. This will allow for a transition period for businesses and taxpayers to adjust to the new rules regarding this form.
Could there be changes for the 2024 tax year? Possibly. Is it conceivable that the reporting threshold might eventually be reduced to $600? Potentially. This topic is likely to remain under discussion in the coming tax years.
************************************************************************************************
Be Safe - Hire a Professional
Taxpayers who use a professional, such as a CPA or EA, can ask that professional for the estimated date of their tax refund, and they can be more confident that their taxes have been properly (and legally) filed.
There are also apps for Apple, Android and other devices that help track refund status.
Other Notes: - In general, the IRS says that returns with refunds are processed and payments issued within 21 days. For paper filers, this can take much longer, however. The IRS and tax professionals strongly encourage electronic filing.
What If You Can't File Your Income Taxes By April 15? - Taxpayers who don't have all of the paperwork needed in order to file their taxes can easily file an extension form, "Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return." - This will give the taxpayer until October 15 to file their tax return. No reason or excuse is needed to receive this extension, and as the title states, it is automatically granted.
However, if a person will owe taxes, it is still their obligation to pay those taxes by April 15, even if they have requested an extension to file. A professional can assist with this. Those who are due a refund generally only need to file the extension request by April 15. Any tax professional and most do-it-yourself tax programs can perform this task. CLICK Here To Get Started NOW!