DES MOINES – Tax season has already started and there are some changes that you need to be aware of before filing.
The Child Tax Credit is lowered in 2022 from $3,600 per child to just $2000 per child. For those that aren’t prepared, that could mean trouble.
Cameron McCarty, the President at Vivid Tax & Wealth Advisors, said that his clients who check in throughout the year are dealing with changes well, but he has seen people who are just now starting — run into trouble.
“So for people what I’m seeing is they didn’t withhold enough so they owe or they were getting those credits but those credits have been lowered have been lowered so now they may get less of a refund or maybe they owe money back,” McCarty said.
For the tax year 2023, there are some big changes coming to state taxes, especially for Iowans 55 or older and Iowans who are disabled.
“We had a huge tax reform that was signed into law March of last year it’s House File 2317 specifically it’s for Iowans 55 or older or disabled for pensions IRA distributions and here’s the big one, ROTH conversions, there is no more state tax you’re just dealing with federal,” McCarty said.
Also for tax year 2023, are changes from the Secure 2.0 Act, adding more provisions for retirement funds.
“The President signed into law Secure Cct 2.0 at the end of last year so there are over 99 additional provisions for retirement accounts one of them being pre-tax money for employer matching so it used to be just traditional now it can be ROTH but keep in mind that increases you AGI, adjusted gross income, but that gives people the ability to get more money into the ROTH,” McCarty said.
McCarty recommends working with a professional to navigate changes in tax law and make the most of your tax return.