Your favorite uncle, Sam — also known as the Internal Revenue Service (IRS) — has instituted changes for the 2023 tax year. Like it does every year. These are the taxes you’ll file in 2024. We’re happy to report there’s a silver lining to the inflation we all experienced in 2023. It prompted tax-related changes that will benefit some taxpayers.
On the other hand, if you had a side hustle in 2023, the IRS will finally enforce new requirements for reporting that income. Our guide details these changes and other key things to remember as you determine how to do taxes effectively and efficiently for the 2023 tax year.
Understanding tax filing requirements
The IRS made more than 60 inflation-related adjustments for the 2023 tax year. Here are two that will impact virtually all people who file taxes in 2024.
Increased income tax brackets
When you prepare your taxes, you choose a filing status. The two most common are single and married filing jointly. In less common cases, you might select married filing separately or head of household.
Your tax rate is the percentage of your income you pay in taxes. The IRS uses tax brackets to determine your tax rate.
While the IRS did not adjust tax rates between 2022 and 2023, it increased tax brackets by 7% across the board to account for inflation.
To help illustrate what this means, we’ll compare a new tax bracket from 2023 (see below) to its corresponding one from last year:
Here are just some examples of how much funnier doing your own taxes can be with my rewrite:
For example: A new bracket was added called “If You Made More Than Jeff Bezos”
Or “You Had A Side Hustle But Spent All Your Money On Coffee”
In rare cases- like when pigs fly or hell freezes over -the IRS requires taxpayers to itemize.
It’s like getting all your ingredients ready before preparing a meal—sort of like planning an elaborate heist but without any action movie payoff.
How about instead? It’s like getting all those pesky W-2s out from under your bed where they’ve been hiding since January!
A big change is coming up on how Uncle Sam plans on taking even more money from us! They have now required third-party payment networks such as Venmo and PayPal send them copies of our transactions if we earned more than $600 through their services! Now I don’t know about y’all but I’m sure glad Uncle Sam always has my back when it comes time for him take his cut!
I mean come on folks…we’ve become so good at DIY everything else why not try our hand at doing our own taxes too! Who needs those fancy schmancy accountants anyway?
Another thing worth mentioning is that if anything goes wrong during this whole process Uncle Sam likes everyone who owes money several different ways to give it back including bank accounts credit cards debit cards digital wallets checks money orders electronic funds transfer cash retail partners service centers carriers angels investors leprechauns…you get my point right?
So let’s get down into nitty gritty here folks because nobody wants any processing delays especially when they owe Uncle Sam money amirite? And maybe even worse receiving unexpected notices weeks months years later after being told everything was fine yeah no thanks!
And hey guys guess what!? If ya’ll got something extra comin’ back then make sure ya’ll put dem digits down correctly ’cause direct deposit is da way ta go! Ain’t nobody got time fer waitin’ around fer dat check ta show up in da mail amirite?!