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1. Tax brackets got wider

     When comparing tax year 2022 to 2023, there was a big adjustment to the federal income tax brackets, according to experts.

While the rates didn’t change, there was roughly a 7% increase in the brackets, which expanded the amount of taxable income you can have in each tier. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

2. There’s a bigger standard deduction

     Inflation also boosted the standard deduction for 2023, which reduces your taxable income, but makes it harder to claim itemized tax breaks for charitable giving or medical expenses.

For 2023, the standard deduction increased to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850 for 2023, an increase from $12,950.

3. Form 1099-K reporting changes are delayed

     The IRS in November delayed a 2023 reporting change for business payments made via apps such as PayPal or Venmo.

Prior to the change, even a single payment of $600 would have triggered Form 1099-K, which reports business payments to the IRS.

Referring to 2023 as a “transition year,” the IRS said 2023 would have the old limit of more than 200 transactions worth an aggregate above $20,000.

4. Energy tax credits are in play

     If you purchased a vehicle in 2023 or made energy improvements to your home, you could qualify for tax breaks, according to the IRS.

The clean vehicle tax credit caps the break at $7,500, while eligible eco-friendly home improvements could be worth thousands more.