2023 Rates and IRS Limits
2023 is here! The IRS has released their 2023 "Dirty Dozen" List. Please go to IRS.gov website for the complete list of taxpayer caution advise. Here is what is new for 2023. The Inflation Reduction Act extended certain energy related tax breaks and indexed for inflation the energy efficient commercial buildings deduction beginning with tax year 2023. For tax year 2023, the applicable dollar value used to determine the maximum allowance of the deduction is $0.54 increased (but not above $1.07) by $0.02 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent. The applicable dollar value used to determine the increased deduction amount for certain property is $2.68 increased (but not above $5.36) by $0.11 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent.
Standard Deductions will be: Single (Under 65) $13,850; (65 or Older) $14,700; Married Filing Joint $27,700; Head of Household (Under 65) $20,800; (65 or Older) $21,150.
Higher Education Maximum Deduction will be up to $2,500 per student depending on adjusted gross income.
Educator Expenses Deduction will allow up to $300 for business expenses paid for books, supplies, computer equipment and other equipment and supplementary materials used in the classroom.
Standard Mileage Rates will be:
| 2022 (Jan-June) | 2022(July-Dec) | |
| Business | 65.5¢ / mi. | 65.5¢ / mi. |
| Relocation | 22¢ / mi. | 22¢ / mi. |
| Medical | 22¢ / mi. | 22¢ / mi. |
| Charitable | 14¢ / mi. | 14¢ / mi. |
Earned Income Credit could be available to a taxpayer having at least one qualifying child and earning less than $59,187.
IRA Contribution Limits (Traditional and Roth) for this year will be $6,500 or, $7,500 if over the age of 50 at the end of 2023.
Possible Penalties For Lack Of Compliance
Almost all payroll duties have a penalty for lack of compliance or failure to file. No one plans to miss a deposit, fail to file a report on time, or not be aware of a new rule or regulation. However, just one error can cost hundreds, if not thousands of dollars.
Some examples are:
- Insufficeint Federal Payroll Tax Deposits = Up to 15% of Amount Underpaid
- Late Filing or Failure to File IRS Form 940 = Up to 100% of Unpaid Liability
- W-2 Issuance and Filing = Up to $100 Per Occurrence
- Employment Tax Record Retention = Up to $100,000
- Insufficient INS I-9 Form Compliance and Retention = Up to $10,000 Per Violation
