The 2023 income tax filings are almost here, and even if you dread the process, you can’t run away! Planning for a nation’s filing is a huge task, and just like you, the government is too gearing up. But what about you?

Are you aware of the credits you are eligible for? Have you decided how to file your taxes – electronically or the same old way? Moreover, how do you wish to get the refunds?

There are a few important things that you should consider for the 2023 tax-filing season. Let’s dive straight into it!

2023 Tax-filing for the US

The Internal Revenue Service (IRS) expects a whopping 168+ million individual returns filings this year, and a majority of them are expected before the filing deadline – April 18.

Now, in her yearly report to Congress, the National Taxpayer Advocate warned legislators that the backlog creates “challenges for the 2023 tax filing season before it even starts and [continues] frustration and delays for taxpayers.”

And while you, the taxpayer, may still have to deal with backlogs and wait times, the following things may help.

1. Pre-pandemic reliefs that no longer apply

Even though taxpayers won’t have to worry about pandemic aid in 2022, they may get fewer refunds because of it. For instance:

• When filing your taxes for the 2022 fiscal year, you will not be eligible for the recovery refunds that may be used as tax credits for the 2020 and 2021 filing seasons.
• With an earnings cap of $1,500 and limited refundability after 2021, the increased child tax credit (CTC) reverts to its pre-2021 level of up to $2,000 per kid. It was $3,600 in 2021 per dependent.
• From $8,000 in 2021, the child and dependent care tax credit (CDCTC) dropped to $2,100 in 2022.
• Although the itemized deduction for charitable contributions will still be accessible in 2022, the above-the-line charity deduction of up to $600 for joint filers will no longer be allowed.

2. Change in reporting rules for Form 1099-K

Anybody who received more than $600 in payments from a third party in 2022 will receive the following three:

• IRS Form 1099-K
• Payment Card
• Third-Party Network Transactions.

However, before 2022, Form 1099-K was only issued for transactions using third-party networks if both of the following conditions were true:

• The total number of transactions was more than 200.
• More than $20,000 was exchanged as a whole.

But here’s something you should keep in mind. Gifts and reimbursements of personal costs made in cash via third-party payment networks from friends and family are not taxable

3. Premium Tax Credits may be available to more taxpayers

The premium tax credit (PTC) is a refundable benefit that assists qualified people, and families in paying the premiums for health insurance plans obtained via the Health Insurance Marketplace.

The American Rescue Plan Act (ARPA) temporarily enhanced premium tax credit eligibility for the 2021 and 2022 tax years by doing away with the requirement that a taxpayer’s family income must not exceed 400% of the federal poverty level to get a premium tax credit.

2023 Tax-filing in Canada

Most Canadians have until April 30, 2023, to submit their return. As Sunday, April 30, 2023, is a Sunday, the Canada Revenue Agency (CRA) must receive your return on or before Monday, May 1, 2023, to count as timely.

Self-employed people and their spouses or common-law partners have until June 15, 2023, to submit their tax returns. The payment date for any outstanding debt is April 30, 2023.

Besides the dates, here are a few more things to keep in mind:

1. Eligibility for Climate Action Incentive Payment (CAIP)

Individuals and families may receive a tax-free sum from the federal government called the Climate Action Incentive Payment (CAIP). If you are a resident of the following provinces, you may be qualified for the CAIP:

• Alberta
• Saskatchewan
• Manitoba
• Ontario

However, this year, the eligibility extends to the residents of the following provinces and territories:

• Newfoundland and Labrador
• Nova Scotia
• Prince Edward Island

You and your spouse/common-law partner (if applicable) must both be eligible individuals and submit an income tax and benefit return for the year to qualify for the CAIP. It’s important to note that only one member of a married or common-law couple is eligible for CAIP coverage. 

2. Dental benefits

The interim Canada Dental Benefit helps cover dental treatment costs for children under 12 whose families can’t afford other coverage options. If a child is currently enrolled in another government dental program, but just a portion of their dental bills is covered, they may also be eligible. Parents or guardians may request two payments per qualified kid.

The applications opened on December 1, 2022. The qualified families have an adjusted family net income of less than $90,000 in 2021.

3. Canadian housing benefit

To assist low-income tenants with housing affordability issues, the government has instituted a one-time, tax-free payment of $500. Beginning on December 12, 2022, tenants who meet the following conditions are eligible for this benefit:

• To assist low-income tenants with housing affordability issues, the government has instituted a one-time, tax-free payment of $500. Beginning on December 12, 2022, tenants who meet the following conditions are eligible for this benefit:
• The deadline to apply is March 31, 2023. You must have submitted your tax return for the year 2021.

Wrapping up

Income tax return filing is one of the most important financial activities you will carry out throughout the year. And thus, you must do it right. We are optimistic that after reading this blog, you are well aware of the updates in the filing process and what to expect this year.

However, if you still have any doubts, why not consult experts like GJM & Co.? We will walk you through all the details and how they may impact your business. Furthermore, we can assist you with other financial activities such as accounting, bookkeeping, generating financial statements, and more.

Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.in.