Tax Season – The IRS began accepting 2022 tax returns for processing on January 23, 2023 so we are well into tax season here at Lighthouse. The most important things for our clients to remember is to be sure to send your files to us securely, send all your information to us at the same time (or as much as is possible) and don’t lose sleep over tax code changes – leave that to us! The filing deadline is April 18, 2023. If you have a federal tax refund coming, you can track it by using the Where’s My Refund tool at https://www.irs.gov/refundshttps
I-Bonds – A topic much discussed over the last 3 years. The current composite rate is 6.89% which consists of a variable rate of 3.24% and a fixed component of 0.4%. I-Bonds purchased before May 1st will earn this rate for the first 6 months and then retain the 0.4% for the life of the bond. Even with interest rates steadily climbing there are few opportunities for an almost 7% yield that is essentially a risk-free investment. However, depending on your cash reserves, I-Bonds may or may not make sense. As a reminder, the rate changes 2x/year, so to lock in the 6.89% for 6 months, the purchases must be made before the end of April 2023. There is also a $10,000 per year maximum purchase limit per person.
NJ Anchor Credit – The deadline to sign up was 2-28-23, and the amount of Jerseyans that signed up was an astounding 1.7 million! The application filing for the program was extended twice to accommodate the influx of applicants. Payments will be issued in the form of checks or direct deposits and are not subject to NJ state income tax. Filers can check their refund status here.
The program seems here to stay. In 2023, applications should be sent out in the fall again and eligibility will be based on 2020 NJ income.
Debt Ceiling – There’s already been quite a bit of buzz around this topic in the media and we think it’s safe to say that the next 3 months will continue to bring a wealth of varying opinions and plenty of tension. To shed some light on the subject here are a few facts: The debt ceiling will likely need to be raised or suspended after America hit its technical debt limit in January. The currently permitted “extraordinary measures” allow the Treasury to continue paying out debt obligations to the borrowers only until early June 2023. Considering the vulnerability of the current economy it’s essential for lawmakers to come to terms on the debt limit and fiscal policy.
Tax Refunds – With the tax season having kicked off on 1-23-23, the IRS has already started to process refunds for those that filed “early.” The IRS anticipates most taxpayers will receive their refund within 21 days (3 weeks) of when they file electronically if they choose direct deposit and there are no issues with their tax return. This is a perfect reason to get your tax documents together as soon as possible and get them over to us to file!