Tax rules are different every year, but 2023 saw a few significant changes that you don't want to ignore. CPA and TurboTax expert Lisa Greene-Lewis highlights some of the more important ones. Watch the video above or read the transcript below.
Video transcript:
Tracy Byrnes: Well, as the tax deadline approaches, there are a ton of changes that you need to be aware of before you sit down and start prepping your tax return. Lisa Greene-Lewis, CPA, TurboTax expert is here with us to walk through some of them. Lisa, I think the first big one is inflation and what it did to everything.
Lisa Greene-Lewis: Yes, that is one of the ones I wanted to highlight. So inflation adjustments were increased the most we've seen in decades, about 7%. And inflation adjustments are the deductions, like standard deduction, income brackets, as well as the earned income tax credit. So the standard deduction, about 90% of tax filers can claim that. So the increase in that deduction is really going to help tax filers' outcomes this season. If you're single, the standard deduction is $13,850; married filing jointly is $27,700.
Tracy Byrnes: So everything went up. Now, Covid was front and center on our tax returns for a lot of years. Are there still things we need to worry about?
Lisa Greene-Lewis: Last tax season, what we saw, Covid relief went away. That was the first time that a lot of the Covid relief went away. So people did report that they may have seen lower refunds if they were eligible for that Covid relief. So for instance, child tax credit, child and dependent care credit, that's some of the relief that people were able to get.
One thing to point out, you can still claim those credits. The child tax credit, it went from $3,600 to the pre-Covid amount of $2,000. The child and dependent care credit, that was up to $8,000 for two or more kids under Covid relief. It is now back to $2,100, but I just want to point out you can still get those credits.
Tracy Byrnes: That's a great point, actually. And speaking of inflation, the Inflation Reduction Act created a bunch of energy-efficient credits that people should know about. We did a whole other video on that. People should watch it. But real quick, what should people know about the changes to those?
Lisa Greene-Lewis: Yeah. What they should know is 2023 is when those really kick in. We had the $7,500 credit for new electric vehicles but now you can purchase a used electric vehicle and you can get a credit up to $4,000 or 30% of the purchase price, whichever is lower. And then for energy efficient improvements in your home, those credits went up. So before, it was a $500 credit, and that was lifetime. They did get rid of the lifetime requirement. So now if, let's say you put windows in, you get up to $1,200 a year. So I know windows are really expensive, maybe you want to do a strategy and replace like a couple windows every year and you could get that $1,200 credit.
Tracy Byrnes: That's actually a great tip. And finally, student loans, that has been the talk of the town these days. What do people need to know if they're paying student loans back?
Lisa Greene-Lewis: Yes, so the pause on student loans, that went away. And you if you had a federal student loan, you had to start paying again of October of last year. So with that, you do get a student loan interest deduction. So now that you're paying, just be mindful, look at the interest that you paid so you can deduct that on your taxes —and that's up to $2,500.
Tracy Byrnes: Yeah, super important to keep track of all this stuff. Speaking of keeping track, TurboTax has some updates as well. Tell us about those.
Lisa Greene-Lewis: We have had TurboTax Live where our TurboTax Live experts can either guide you along the way and review your return before you file. And we also had where you can fully hand your taxes off to them. New this year, you can meet with a local pro in your area and get your taxes done just if you want to build a relationship with them in person. So we have that option.
And then we also have our Intuit Assist, and that's our own AI and it actually does real-time checks of your tax return. And it can also translate our product fully in Spanish.
Tracy Byrnes: Lots of new stuff this year. Lisa Greene-Lewis, TurboTax expert and CPA, thank you for breaking it all down.
Lisa Greene-Lewis: Thank you for having me.
