What’s New for Tax Season?
Tax preparers may get a break this year from last minute law changes. It’s not unheard of for Congress to pass last minute tax changes but it doesn’t seem likely as we approach the end of 2023. The government narrowly missed another shut down a little over a week ago when, yet another temporary budget was passed that will bring the Federal government into the early parts of next year. Come January, it’s more likely that tax changes and spending adjustments will be tied to a more permanent budget but the impact to the filing season for 2023 returns seems minimal.
So, what is changing for this upcoming tax season?
The IRS announced two weeks ago that brackets will be adjusted for inflation along with other amounts such as standard deductions. Other amounts adjusted for inflation include HSA, 401(k) and FSA contribution limits, gift tax exclusions and the earned income credit. The inflation changes are smaller than the adjustments at the end of 2022 but will provide some reprieve to taxpayers, nonetheless.
The biggest change coming this season will be the impact of AI on the preparation process as preparers anxiously await the performance reviews on AI generated tools and tax preparation software meant to make the filing season merrier and brighter.
Both Thompson Reuters and Intuit have announced new and improved preparation software tools, powered by AI and meant to make tax preparation more efficient. TR announced enhancements to its software, SurePrep Tax Caddy which included an AI powered tool for document auto-categorization to enhance the automatic preparation of tax returns. Intuit includes an abundance of new dashboard features, add-on apps like Booke.ai and QuickBooks Ledger all meant to help preparers improve tax preparation time by automating categorization and organization of transactions to improve automatic push to tax returns. In addition to efficiency, expect to see more companies offer tax chatbot services powered through AI.
Preparers should also be aware that the IRS is piloting its direct file program during the 2024 tax season. Taxpayers in a select 9 states that have chosen to work with the IRS may be able to directly file their returns electronically with the IRS for free this year. If you’re approached by clients who may not be a good fit for a preparer, who possibly clients with working age children that are able to easily file their own returns, this may be a good option for them to consider during the 2024 filing season. To see if you’re in one of the 9 states you can read more here.
Don’t forget to register for this month’s Tax Talk if you want to get more details on changes for the upcoming tax season and how to prepare your practice for what’s new this season. Register here for the December 14th event.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and providing strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.