Per Diem Rates

To view new per dim rates visit www.gsa.gov/perdiem Railroad per diem rates are subject to different rules Lodging per diem cannot be used for self-employed. Only actual costs can be used. Meals and incidentals are allowed at per diem for this group, Lodging for employees can only be used for substantiation purposes for employers to determine reimbursement and income exclusion.

Standard Deductions - 2023

Married Filing Joint - $27,700 Single/Married Filing Jointly (other than head of household or surviving spouse) - $13,850 Head of Household - $ 20,800 Standard deduction for dependent on another’s return is the greater of $1,250 of the individual’s earned income for the year plus $400 but not more than the standard deduction amount Age 65 and over or blind, per person - MFJ, QW or MFS $1,500 , Single or Head of Household $1,850

Foreign Earned Income Exclusion

The maximum amount for Foreign Earned Income Exclusion is $120,000. If both spouses have FEI then each spouse qualifies for this exclusion.

Section 179 Deduction

For 2023 the maximum Section 179 deduction is $1,160,000. This does NOT include SUV’s unless over GVWR rating of 6,000 lbs (sport utility vehicles). SUV limitation is $28,900. The Section 179 cannot exceed the taxpayers income. If the cost of the Section 179 property placed into service in 2023 exceeds $2,890,000, the available Section 179 deduction is reduced by the amount of the excess (but not below zero). Amounts disallowed can be carried forward. Kiddie Tax Kiddie tax applies when a child’s unearned income (Investment income) over $2,500.00. It is then calculated using normal tax rates and is taxed at the parent’s marginal federal income tax rate. If they qualify a parent may add the child’s unearned income to their return. Qualifications are Married Filing Jointly or the parent with the higher income if parents are Married Filing Separate or unmarried and living together and there is not earned income for the child (ie wages, self-employment).

Student Loan Deduction

Up to $2,500 of interest including early payments not yet required, interest on refinanced or consolidated loans and capitalized interest. Must be incurred by the taxpayer solely to pay for qualified education (including debt incurred solely to pay for student loans such as home equity loans, credit cards). The loan cannot be from a related person or qualified employer plan. Ineligible for this deduction are taxpayers filing Married Separate or a taxpayer that is claimed as a dependent. Phaseout based on Modified Gross Income for Married Filing Joint is between $140,000 and $170,000 (after $170,000 no deduction is allowed), and Single, Head of Household or Qualifying Widow(er) phase out is between $70,000 and $85,000. (after $85,000 no deduction is allowed.)

Required Minimum Distributions

Taxpayers generally must start taking RMD’s upon reaching the age of 72 years. This is the minimum amount a taxpayer is required to withdraw each year. The taxpayer can take more than the RMD but will be subject to a 50% penalty for failure to withdraw the RMD in the year they turn 72. You have the option in the first year ONLY to take it the next tax year but then you must take 2 RMD’s in that year. If you have multiple IRA’s you can take the RMD from one or several - the choice is yours as long as the total overall RMD is taken in the year required.