#taxes #IRS #youtube #yahoofinance
This segment originally aired on March 1, 2023.
Fidelity Investments’ Louis Barajas joins Yahoo Finance Live anchors Julie Hyman and Brad Smith to discuss tax filing, new IRS rules, deductions, and extensions.
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As we enter the year 2023, the IRS has introduced new rules and regulations regarding the filing of taxes. It is essential to stay updated with these changes to avoid confusion and any penalties that may arise due to non-compliance. In this article, we will explore these new rules and explain the itemized deductions in more detail.

New IRS Rules in 2023

One of the most significant changes in the tax filing process is the introduction of digital tax returns. The IRS has shifted its focus towards an online platform for submitting tax returns, making the entire process more convenient and streamlined.

Another critical rule introduced by the IRS is the increase in the standard deduction amount. In 2023, the standard deduction for individual taxpayers will be $12,550, which is a slight increase from the previous year’s amount. Additionally, married couples filing jointly will have a standard deduction of $25,100.

The IRS has also introduced changes in the bracket for tax rates. In 2023, the tax bracket will start at 10% and increase to 37% for higher-income individuals. It is essential to note that these brackets are subject to change based on individual filing status and other factors, such as deductions and credits.

Itemized Deductions Explained

Itemized deductions are expenses that taxpayers can deduct from their taxable income to reduce the amount of tax owed. These deductions include:

1. Medical and dental expenses: Taxpayers can deduct any medical or dental costs that exceed 7.5% of their adjusted gross income (AGI).

2. State and local taxes: Taxpayers can deduct up to $10,000 in state and local taxes.

3. Mortgage interest and property taxes: Taxpayers can deduct mortgage interest and property taxes paid during the tax year.

4. Charitable donations: Taxpayers can deduct donations made to qualifying charitable organizations.

5. Casualty and theft losses: Taxpayers can deduct losses due to theft, fire, or natural disasters that are not covered by insurance.

It is essential to note that taxpayers can choose to either take the standard deduction or itemize their deductions, depending on which one provides them with more significant tax savings.

Conclusion

Filing taxes can be a daunting task, but staying informed about the new IRS rules and itemized deductions can help simplify the process. It is essential to keep a record of all your income and expenses throughout the year to accurately determine your tax liability. Seeking professional advice from a tax professional can also help ensure compliance with the current tax laws and regulations.