Nov 22

Protect yourself from Fraud (December-2022)

This month I want to remind everyone how to protect yourselves from fraudulent filing of your tax return. The IRS has a procedure enabling you to acquire a Personal Identification Number (PIN).  The procedure is simple, and you use it while you file your return so that your identity can be confirmed. The IP PIN is a six-digit number known only to you and IRS. After you apply, the IRS will send you a new IP PIN each year.  From IRS.gov use the “Get an IP Pin” tool. If you don’t have an account on IRS.com you will need to register first. The IP PIN tool is generally available starting in mid-January through mid-November, so you may want to set a reminder on your calendar. You can also obtain an IP PIN for your spouse and dependents. In the event you lose it, you will be able to retrieve it by signing back and follow the instructions under “retrieve your IP now.”  Next the Internal Revenue Service (IRS) has released the inflation-adjusted marginal rates and brackets for 2023, and you find higher take-home pay in the new year as less tax is withheld from their paychecks. The standard deduction will increase by $900 to $13,850 for single taxpayers, $1,800 for married couples, to $27,700., and for heads of household, it will increase $1,400 to $20,800. That's an increase of $1,400.  The marginal tax rates have been adjusted to reduce the tax on your taxable income approximately 10%, for the 10% bracket and it flows out from there. The maximum Earned Income Tax Credit will be $7,430 for those who have three or more qualifying children. The maximum contribution to a health care flexible spending account is also increasing, from $2,850 to $3,050.  Every individual is permitted an annual exclusion for gifts and it will increase to $17,000, that’s $34,000 for married couples.  Don’t forget all Social Security Benefit recipients will receive an increase of 8.7% and the premium for your Part B coverage will drop from $170.10, monthly, to $164.90, beginning January 1, 2023.  Your contributions to your 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $22,500, up from $20,500.  Individual IRA’s has increased to $6,500, up from $6,000. Catch up contribution for your IRA  remains at $1,000, if aged 50 or over.  However, for your 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $7,500, up from $6,500.  And, the catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000.  Also, as we close out the year, you may need to evaluate Required Minimum Distributions from inheritance, contributions to your retirement arrangements, review your investments and be sure to evaluate your tax preparer assistance credibility, years in practice, credentials, and most of all, ask around to see who they trust when making this decision. In closing, myself, and my staff, wish everyone a happy and safe Holiday Season, with success and love in the New Year. God Bless!  This is a very brief overview.   For details and specific assistance in applying the general information in this article, call us at your earliest convenience or contact your tax advisor.   Provided by Tracey C. Higginbotham, E.A., (321) 632-5726, a member of the National Society of Accountants.