It’s early March, so it’s quite possible that many of our readers have already filed their 2023 Tax Returns, but here are some things to consider for those who are still waiting for those last brokerage statements, or simply procrastinating!
Not too many changes on the Federal side this year, but here are a couple of things to be aware of:
On the “bad side,” the above the line charitable contribution deduction for those who take the standard deduction is no more. But there is still a way to get a charitable deduction if you are required to take an RMD (Required Miminum Distribution) from your retirement accounts. A QCD (Qualified Charitable Distribution) will reduce your taxable distribution.
Worth noting is that most brokerage 1099’s do not reduce the Taxable Distribution shown on your 1099 by that amount. It’s up to you to keep those records. If you prepare your own returns, you’ll need to know that most tax software programs give the option to make the adjustment, way down in the 1099 input form. If you use paid preparers, you’ll need to provide them with that information.
On the “good side,” Energy Efficient Home Improvement Credit has become more generous. Be sure to check them out if you have replaced doors, windows, heat pumps, hot water heaters, and/or have had a home energy audit performed.
Moving on to South Carolina, be aware that South Carolina also has a Residential Retrofit Credit which is worth exploring if you made improvements to your home in 2023.
What else has changed in South Carolina? Both the Two Wage Earner Credit and the Dependent Exemptions have increased. The Motor Fuels Credit was discontinued for 2023, so there’s no point in saving your gasoline receipts anymore!
As always, a word of caution to our new neighbors who moved to South Carolina in 2023 but are still using an out-of-state tax preparer. South Carolina has several generous deductions and credits, which may not transfer automatically from a Federal return and/or may need to be input separately.
Are you saving for your grandchildren’s (or anyone else’s) college expenses? Did you know that in South Carolina, all contributions to the Future Scholar 529 are tax deductible? And, with all our home insurance costs soaring, did you know that the Excess Insurance Premium Credit of up to $1,250 is available if your insurance costs exceed 5% of your AGI (Adjusted Gross Income)? Also, if you’re over 65 and a South Carolina Resident, be sure to check out the Homestead Exemption on your property taxes, which is available after you’ve lived here for a year. You’ll need to apply for that, as it doesn’t come automatically.
-Submitted by Seabrook VITA Volunteer.
(Image credit: Istax.com and myarmybenefits.us.army.mil)