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Retirement Savings Contributions Credit. Depending on modified AGI, the credit amount is either 10%, 20% or 50% of eligible contributions. The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 for MFJ). Use the following chart to calculate the credit.
| Rate | MFJ | HOH | Single, QW, MFS |
| 50% | $0 – $43,500 | $0 – $32,625 | $0 – $21,750 |
| 20% | $43,501 – $47,500 | $32,626 – $35,625 | $21,751 – $23,750 |
| 10% | $47,501 – $73,000 | $35,626 – $54,750 | $23,751 – $36,500 |
| 0% | Over $73,000 | Over $54,750 | Over $36,500 |
Contributions are reduced by any distributions from the above plans received by the taxpayer(s) after 2020 and before the due date of the 2023 return, including extensions.
Divorced or Separated Parents. A noncustodial parent claiming an exemption for a child can no longer attach pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement went into effect after 2008.
Social Security & Medicare Taxes. The maximum wages subject to social security tax is $160,200 for 2023 and $168,600 for 2024. All wages are subject to Medicare Tax.
Additional 0.9% Medicare Tax. For 2023, wages and self-employment income are subject to a 0.9% additional Medicare Tax to the extent they exceed $250,000 (MFJ), $200,000 (Single, HOH, QW) and $125,000 (MFS).
3.8% Net Investment Income (NII) Tax. In 2023, individuals are subject to a NII tax equal to 3.8% of the lesser of their NII or the excess (if any) of modified AGI over the threshold amounts of $250,000 (MFJ, QW), $200,000 (Single, HOH) and $125,000 (MFS).
Charitable Giving. You must have a dated receipt from the charity and a canceled check or credit card statement to prove the deduction. Also, for non-cash donations such as clothing and household items, make sure you make an inventory list of everything you are giving and attach it to the receipt received from the charity. A picture of the donated items will also help support your deduction.
Premium Tax Credit. Individuals with low to moderate income who get health coverage through the Health Insurance Marketplace (also called the Exchange) may be eligible for this refundable credit. Some individuals may have chosen to have all or some of the estimated credit paid in advance directly to the insurance company. Advance payments paid during the year are subtracted from the amount of the Premium Tax Credit. If the advance payments exceed the credit, the difference (up to certain limits) is an additional amount of tax due.
Nanny Tax. Taxpayers must file Schedule H with their personal tax return if 1) the taxpayer paid a household employee cash wages of $2,600 or more in 2023 or 2) the taxpayer paid cash wages of $1,000 or more in any calendar quarter to all household employees or 3) the taxpayer withheld federal income tax.
Per Diem Allowance. The per diem allowance for meals within the United States for 2023:
Standard Rate – $64 Transportation Workers – $69
Generally, a taxpayer may only deduct 50% of business-related meal expenses. An exception is for the transportation industry where the taxpayer may deduct 80%. This can include individuals working on an airline, barge, bus, ship, train, or truck. Per Diem allowances for specific cities may benefit you. See your tax preparer for details.
Teachers. Elementary and secondary school teachers are allowed a $300 deduction for classroom expenses. The maximum deduction is $600, however, neither spouse can deduct more than $300 of his or her own qualified expenses. Eligible educators include kindergarten through grade 12 teachers, instructors, counselors, principals, or aides in a school for at least 900 hours during a school year. Qualified expenses include books, supplies, equipment (including computer equipment and software), and other materials used in the classroom. Also, as of March 12, 2020 educator expenses include the cost of personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of COVID-19 in the classroom. No deduction is allowed if the expenses are reimbursed by the employer and not included in box 1, W-2.
