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Navigating 2023 Tax Returns: A Comprehensive Guide to Rev. Proc. 2022-38 For Tax Preparers
Summary of Rev. Proc. 2022-38
Adoption Credit
- Special Needs Child: Credit of $15,950.
- Other Adoptions: Credit up to $15,950, equal to qualified expenses.
- Income Phase-Out: Begins at $239,230, fully phased out at $279,230+.
Child Tax Credit
| Total Income | $1,600 – $63,398 |
|---|---|
| Earned Income | $11,750 – $16,510 |
| Maximum Credit | $3,995 – $7,430 |
| Phaseout Start | $21,560 |
| Complete Phaseout | $46,560 – $56,838 |
Excessive Investment Income
- EITC Limitation: Not allowed if investment income exceeds $11,000.
Refundable Credit for Qualified Health Plan
- Excess Advance Credit Payments: Limited as per § 36B(f)(2)(B) table.
Rehabilitation Expenditures
- Per Unit Basis: $7,900 for low-income units.
Low-Income Housing Credit
- State Ceiling: Greater of $2.75 x State population or $3,185,000.
Employee Health Insurance for Small Employers
- Dollar Limit: $30,700 under § 45R(d)(3)(B).
Alternative Minimum Tax Exemptions
- Exemption Amount: $126,500.
- 28% Tax Rate Threshold: $110,350+.
- Phaseout Details: As per § 55(d)(2).
Child’s Earned Income:
Energy Efficient Commercial Building Deduction
- Deduction: Child’s earned income + $8,800.
- Deduction: $300 for books, supplies, computer equipment.
- Deduction: $20/hour for rig-related expenses.
- Maximum: Greater of $1,250, $400, or individual’s earned income.
- Salary Reduction Limit: $3,050 for health flexible spending arrangements.
- Monthly Limit: $300 for commuter vehicle and transit pass.
- Phase Out: Begins at $137,800 (joint) and $91,850 (others).
- Exclusion: $15,950 for special needs child adoption.
- Calculation: Greater of $120 x State population or $358,845,000.
- First-Time Farmers: $616,100.
- Computation Credit: $1,960.
- Limit: Lesser of $46,000 or 0.2% of base (minimum $5,000).
- Exemption: $4,700 for 2023.
| Description | Amount |
|---|---|
| § 179 Property Expense Cap | $1,160,000 |
| Reduction Threshold | $2,890,000 |
- Base Deduction: $0.54 + $0.02/percentage point over 25% reduction.
- Increased Deduction: $2.68 + $0.11/percentage point over 25% reduction.
| Filing Status | Threshold $ | Phase-in $ |
|---|---|---|
| Married Joint | 364,200 | 464,200 |
| Married Separate | 182,100 | 232,100 |
| All Other Returns | 182,100 | 232,100 |
Eligible Long-Term Care Premiums
- Limitations under § 213(d)(10) include attained age-related limitations and medical savings accounts.
Interest on Education Loans
- Specific limitations apply.
Limitation on Cash Method of Accounting
- Thresholds apply.
Excess Business Loss Threshold
- Specific limits apply.
Agricultural or Horticultural Organizations
- Dues limitations under § 512(d)(1).
Insubstantial Benefit Limitations for Charitable Contributions
- Includes low-cost articles and other benefits.
Taxation and Expatriation Regulations for 2023
| Description | Amount |
|---|---|
| Small Company Tax under § 831(b)(1) | $2,650,000 (excluding premiums) |
| Covered Expatriate Income Tax Threshold | >$190,000 average annual net income tax |
| Expatriation Gross Income Exclusion | Reduced by $821,000 |
| Foreign Earned Income Exclusion | $120,000 |
| Debt Instruments (§ 1274A(b)) | $6,734,800 |
| Cash Method Debt Instruments (§ 1274A(c)(2)) | $4,810,600 |
| Unified Credit Against Estate Tax | $12,920,000 |
| Valuation Cap for Qualified Real Property (§ 2032A) | $1,310,000 |
| Annual Gift Exclusion | $17,000 |
| Passenger Air Transportation Excise Tax | $4.80 per segment |
| Reporting Exception for Organizations (§ 6033(e)(3)) | $132 or less dues |
| Large Gifts from Foreign Persons | >$18,567 |
| Federal Tax Lien Validity | <$1,810 (casual sale), <$9,030 (mechanic’s lien) |
| Property Exempt from Levy | $10,810 |
| Exempt Income Amount (§ 6334(d)(4)(B)) | $4,700 |
| Estate Tax Installments “2-percent portion” | $1,750,000 |
Tax Compliance Penalties for 2024
| Violation | Penalty Range |
|---|---|
| Failure to File Information Returns | $20 – $120, $6,000 – $60,000 |
| Failure to Comply with Public Inspection | $20, $12,000 – No Limit |
| Failure to File § 6034 or § 6043(b) Returns | $10 – $120, $6,000 – $60,000 |
| Failure to Furnish Correct Payee Statements | $310, $3,783,000 |
| Other Assessable Penalties | $600 per failure |
| Partnership/S Corporation Return Failure | $235 |
| Failure to File Correct Information Returns | $60 – $120, $220,500 – $630,500 |
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