Tax Law Updates (2023)

Third-Party Network Transactions (1099-K) Reporting Requirements

• Beginning with tax year 2023, individuals who receive $600 or more through a third party network transaction will receive Form 1099-K (this was intended to be 2022 but IRS has delayed to tax year 2023)

• This includes apps such as Venmo, Uber, Lyft, Cash App, Zelle, PayPal, E-bay, etc.

• Taxpayers must report Form 1099-K on their tax return as income if the funds were received for the sale of goods and services

• If amounts on Form 1099-K are incorrect the taxpayer should contact the issuer

• If taxpayer receives an incorrect 1099-K, they must contact the issuer, not the IRS

Standard Business Mileage Rate

• 65.5 cents per mile

Standard Deductions Adjusted For Inflation

Child Tax Credit

• Child tax credit $2,000 maximum amount ($1,600 refundable Additional Child Tax Credit)

• Qualifying children must be younger than 17 on December 31st of the tax year

• Earned income requirement ($2,500)

Clean Vehicle Credit (Form 8936)

• Replaced the Plug-in Electric Drive Vehicle Credit

• Nonrefundable credit

• Does not carry forward to future tax years

• Maximum amount of $7,500 (new vehicles) $4,000 (used vehicles)

Qualifications

1. Vehicles must be for your own use (not for resale)

2. Vehicle must be mainly used in the United States

3. MAGI can not exceed $300,000 (MFJ), $225,000 (HOH), $150,000 (all others)

4. Truck, Van, SUV must be $80,000 or less, all other vehicles must be $50,000 or less

5. Final assembly must have been in North America

6. Vehicles placed in service after April 18, 2023 must meet critical mineral requirement/critical battery requirement

7. When the vehicle is purchased, the seller MUST give the taxpayer information regarding qualifications. Sellers must also register online and report the information to the IRS. If this does not happen, the vehicle is NOT eligible for the credit.

8. To see the full list of requirements navigate here: https://fueleconomy.gov/feg/tax2023.shtml