IRS Kicks Off 2023 Tax Season
The Internal Revenue Service (IRS) began the 2023 tax season on January 23, bolstered by increased staffing made possible through funds from the Inflation Reduction Act passed last August. This legislation provided the agency with nearly $80 billion in supplemental funding. Part of these resources was allocated for hiring more than 5,000 new telephone assistors and additional in-person staff to aid taxpayers during filing.
We continue to increase IRS staffing to help provide taxpayers with the information and assistance they need.
Improved Service and Reduced Delays
The expanded workforce positions the IRS to handle the current tax season more effectively, as noted in a recent report by the National Taxpayer Advocate. This should mitigate the processing delays and customer service issues experienced in 2022, which resulted in postponed refunds.
New Tax Credits Under Inflation Reduction Act
The Inflation Reduction Act introduces several credits and deductions effective from the start of 2023, potentially leading to taxpayer savings. Consumers purchasing a used electric vehicle may qualify for a tax credit up to the lesser of $4,000 or 30% of the sales price, based on income limits. Buyers of new electric vehicles can claim up to $7,500, representing a dollar-for-dollar reduction in taxes owed.
Households are eligible for credits on energy-efficient home improvements, including electric panels, doors, windows, skylights, and insulation, subject to per-item limits and an annual cap of $1,200. Homeowners can claim up to 30% of costs for heat pumps, heat pump water heaters, or biomass stoves, capped at $2,000. Residential clean energy properties like solar panels and solar water heaters qualify for a 30% tax credit. Starting this year, home backup power battery storage with at least 3 kWh capacity is also eligible.
Tax Filing Deadlines and Refunds
The tax deadline for 2023 is April 18, with the IRS accepting returns since January 23. Tax filers typically receive refunds within two to three weeks. Electronic filers can check refund status 24 hours after submission, with early filers potentially seeing funds by mid- or late February. Refunds involving the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) are released in mid-February after eligibility verification.
