Get ready for the 2023 gift tax return deadline

Did you make large gifts to your children, grandchildren or others last year? If so, it’s important to determine if you’re required to file a 2023 gift tax return. In some cases, it might be beneficial to file one — even if it’s not required.

Who must file?

The annual gift tax exclusion has increased in 2024 to $18,000 but was $17,000 for 2023. Generally, you must file a gift tax return for 2023 if, during the tax year, you made gifts:

  • That exceeded the $17,000-per-recipient gift tax annual exclusion for 2023 (other than to your U.S. citizen spouse), that you wish to split with your spouse to take advantage of your combined $34,000 annual exclusion for 2023,
  • That exceeded the $175,000 annual exclusion in 2023 for gifts to a noncitizen spouse,
  • To a Section 529 college savings plan and wish to accelerate up to five years’ worth of annual exclusions ($85,000) into 2023,
  • Of future interests — such as remainder interests in a trust — regardless of the amount, or
  • Of jointly held or community property.

Keep in mind that you’ll owe gift tax only to the extent that an exclusion doesn’t apply and you’ve used up your lifetime gift and estate tax exemption ($12.92 million for 2023). As you can see, some transfers require a return even if you don’t owe tax.

Who might want to file?

No gift tax return is required if your gifts for 2023 consisted solely of gifts that are tax-free because they qualify as:

  • Annual exclusion gifts,
  • Present interest gifts to a U.S. citizen spouse,
  • Educational or medical expenses paid directly to a school or health care provider,
  • Political or charitable contributions.

But if you transferred hard-to-value property, such as artwork or interests in a family-owned business, you should consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.

The deadline is April 15 The gift tax return deadline is the same as the income tax filing deadline. For 2023 returns, it’s Monday, April 15, 2024 — or Tuesday, October 15, 2024, if you file for an extension.

But keep in mind that, if you owe gift tax, the payment deadline is April 15, regardless of whether you file for an extension. If you’re not sure whether you must (or should) file a 2023 gift tax return on IRS Form 709, contact us. © 2024



How to Establish Reasonable Cause for Missing or Incorrect TINs

Businesses are required to prepare and file a number of information returns with the IRS. Recently the IRS has published an updated Publication 1586, which addresses how payors can prove and claim reasonable cause when they file any information returns (1099, W-2, 1098 etc. forms) with incorrect names or identification numbers on the forms. Reasonable cause is necessary for payors to avoid penalties for reporting inaccurate information.

To establish reasonable cause (and not willful neglect), the filler must establish both that they acted in a responsible manner both before and after the failure occurred and that:

  1. There were significant mitigating factors with respect to the failure (for example, an established history of filing information returns with correct TINs, OR
  2. The failure was due to events beyond the filer’s control (for example, actions of the payee or any other person).

Acting in a responsible manner for missing and incorrect TINs generally includes making an initial solicitation (request) for the payee’s name and TIN and, if required, annual solicitations. The publication addresses various ways payors can solicit TIN information including requesting completed forms W-9.

Mitigating factors or events beyond the filer’s control alone are not sufficient to establish reasonable cause.   Upon receipt of a newly provided TIN, it must be used on any future information returns filed.  Refer to Treas. Reg. 301.6724-1 for reasonable cause guidelines.

Payors are required to solicit the TINs of payees to meet reasonable cause criteria as acting in a responsible manner to avoid information reporting penalties.  Generally, a solicitation is a request made by the payor to a payee to furnish a correct TIN. An initial solicitation for a payee’s correct TIN must be made at the time an account is opened (or a relationship initiated) unless the payor already has the payee’s TiN and uses that TIN for all transactions with the payee.   The solicitations maybe made oral or written request or by electronic communications, depending on how the account is opened or relationship established.   Where a payee’s TIN is missing or incorrect after the initial solicitation, the payor generally will need to conduct annual solicitations for correct TIN to obtain a waiver for reasonable cause.

You should keep copies and notes to document the request for each W-9, keep a copy of each W-9 on file for each tax year.   When possible, we recommend you verify the information provided by employees and payees through the Social Security Administration verification or the verification allowed by “authorized payors of payments subject to backup withholding”.   See the two notes below.

Note: Employers may use the Social Security Administration’s (SSA) Social Security Number (SSN) verification systems to verify the employee’s name and SSN, but there is no Internal Revenue Service (IRS) requirement to do so. The option is useful for employers to identify potential discrepancies and correct SSNs before receiving a penalty notice. For more information, go to

Note: TIN Matching is also available as part of the Internet based pre-filing e-services that allows “authorized payors of payments subject to backup withholding” the opportunity to match Form 1099 payee information against IRS records prior to filing information returns. For more information, go to .

For more information and additional details, see publication 1586. .


IRS Adds Employee Retention Credit Scam to Annual Dirty Dozen List

The IRS recently kicked off its annual Dirty Dozen campaign, which highlights the top 12 scams and schemes that target taxpayers. The “widely circulating promoter claims” regarding Employee Retention Credits (ERCs) is a new entry in the Dirty Dozen list.

The fact that the IRS saw fit to start its campaign with ERC claims reflects its serious concern. “The aggressive marketing of these credits is a major concern for the IRS,” said IRS Commissioner Danny Werfel. “Businesses need to think twice before filing a claim for these credits [and remember that] there are very specific guidelines around these pandemic-era credits.”

For more information:

Reach out to an ATA expert with any questions.


What Makes a Medical Expense Deductible?

The IRS recently posted a list of FAQs concerning the treatment of certain costs related to nutrition, wellness, and overall health. Generally, to be deductible, medical care expenses must meet certain criteria, including that they must be incurred primarily to alleviate or prevent a physical or mental disability or illness. Included are the costs of diagnosis, cure, mitigation, treatment, or disease prevention, rendered by doctors, surgeons, dentists, and other medical practitioners. Also included are the costs of equipment, supplies, diagnostic devices, drugs, and medications prescribed by a doctor. Click here for the FAQs:

Have more tax questions? Contact one of our experts for help.



April 18th Tax Deadline

April 18th is the deadline to file your individual 2022 tax return and pay any tax due. If you can’t file on time, you can request a six-month extension to file. However, any tax owed is generally still due by April 18th to avoid interest and penalties. If you owe taxes and don’t seek an extension to file, the IRS encourages you to file and pay as soon as possible to limit interest and penalties.


Some taxpayers may automatically qualify for extra time to file and pay tax due without penalties. This includes military members serving in combat zones, certain disaster victims, and taxpayers living abroad. If you’re due a refund, there’s no penalty for filing late. Here’s more:


Do you have tax questions or need to file an extension? Contact one of our experts for help.

Helpful Articles News Tax

Scams Taxpayers Should Be Aware of This Filing Season

Among the many scams taxpayers should be aware of this filing season is one involving Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. Some filers have been falsely encouraged to claim the credits based on employee (not self-employment) income.

These credits aren’t even available for 2022. In a similar scheme, taxpayers have invented household workers and filed Schedule H (Form 1040), Household Employment Taxes, claiming they paid their fictitious workers sick and family leave wages. The goal of both scams is to trigger a tax refund.

The IRS encourages anyone who has filed false information to amend their returns. Contact us for help.


Answers To Your Questions About 2023 Limits On Individual Taxes

Many people are more concerned about their 2022 tax bills right now than they are about their 2023 tax situations. That’s understandable because your 2022 individual tax return is due to be filed in 10 weeks (unless you file an extension). However, it’s a good time to familiarize yourself with tax amounts that may have changed for 2023. Due to inflation, many amounts have been raised more than in past years. Below are some Q&As about tax limits for this year. Note: Not all tax figures are adjusted annually for inflation and some amounts only change when new laws are enacted. 


I didn’t qualify to itemize deductions on my last tax return. Will I qualify for 2023? 

In 2017, a law was enacted that eliminated the tax benefit of itemizing deductions for many people by increasing the standard deduction and reducing or eliminating various deductions. For 2023, the standard deduction amount is $27,700 for married couples filing jointly (up from $25,900). For single filers, the amount is $13,850 (up from $12,950) and for heads of households, it’s $20,800 (up from $19,400). If the amount of your itemized deductions (including mortgage interest) is less than the applicable standard deduction amount, you won’t itemize for 2023.

How much can I contribute to an IRA for 2023?

If you’re eligible you can contribute $6,500 a year to a traditional or Roth IRA, up to 100% of your earned income. (This is up from $6,000 for 2022.) If you’re 50 or older, you can make another $1,000 “catch up” contribution (for 2023 and 2022). 

I have a 401(k) plan through my job. How much can I contribute to it?

In 2023, you can contribute up to $22,500 to a 401(k) or 403(b) plan (up from $20,500 in 2022). You can make an additional $7,500 catch-up contribution if you’re age 50 or older (up from $6,500 in 2022). 

I periodically hire a cleaning person. Do I have to withhold and pay FICA tax on the amounts I pay them? 

In 2023, the threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc., who are independent contractors is $2,600 (up from $2,400 in 2022). 

How much do I have to earn in 2023 before I can stop paying Social Security on my salary? 

The Social Security tax wage base is $160,200 for this year (up from $147,000 last year). That means you don’t owe Social Security tax on amounts earned above that. (You must pay Medicare tax on all amounts that you earn.) 

If I don’t itemize, can I claim charitable deductions on my 2023 return? 

Generally, taxpayers who claim the standard deduction on their federal tax returns can’t deduct charitable donations. For 2020 and 2021, non-itemizers could claim a limited charitable contribution deduction. Unfortunately, this tax break has expired and isn’t available for 2022 or 2023. 

How much can I give to one person without triggering a gift tax return in 2023? 

The annual gift exclusion for 2023 is $17,000 (up from $16,000 in 2022). 


These are only some of the tax amounts that may apply to you. If you have questions or need more information, contact us. © 2023



Planning to Deduct for Losses This Tax Season? Be Sure to Read the Fine Print.

Deducting losses is a high-priority item for taxpayers in the highest marginal income tax bracket. The topic will be especially relevant during the 2022 tax compliance season because of recent declines in the stock market and a challenging overall business environment.

With that said, you shouldn’t assume that every business operating loss or capital loss on investments will lead to a 1:1 deduction on your tax return. There are significant limitations and qualifications surrounding these losses, so it’s critical to understand the details.

In this article, we provide a primer on some of the loss limitations that are most likely to affect high income taxpayers during the upcoming tax filing season.

Not All Business Losses Are Tax Deductible

Rising interest rates and other effects of surging inflation have created a challenging environment across industries. As a result, many business owners, whether actively involved in the operations of the business or passive investors, have losses that they can use to reduce their tax bill. But the amount and timing of these deductions may be significantly limited.

Section 461(l) Limit

Even if a taxpayer’s business loss satisfies the basis limitations, the at-risk limitations, and the passive loss limitations, the deduction of that business loss may be significantly limited. That’s because Section 461(l), “Limitation on Excess Business Losses of Noncorporate Taxpayers,” was in effect for the 2022 tax year.  The Excess Business Loss (EBL) limitation applies to any non-corporate taxpayer—including individuals, estates, and trusts—and limits the amount of trade or business deductions that can offset non-business income, such as investment and wage income.

An EBL is defined as the excess of (i) taxpayer’s aggregate trade or business deductions over the sum of (ii) taxpayer’s aggregate gross trade or business income or gain plus the indexed limitation amount (the “threshold amount”). Net business losses in excess of the threshold amount are disallowed and carried forward as a net operating loss (NOL). For 2022, the threshold amounts were $540,000 for those married filing jointly and $270,000 for all other filers. For partnerships and S corporations, Section 461(l) applies at the partner or shareholder level.

Excess Business Loss (EBL) Calculation
EBL = aggregate trade or business deductions –
aggregate gross trade or business income or gain + indexed limitation amount

Net operating losses, Section 199A deductions, and capital loss deductions are excluded from a taxpayer’s EBL calculation when determining the aggregate trade or business deductions. Furthermore, employee compensation is excluded when determining the aggregate gross trade or business income. Capital gains will be limited (when determining aggregate gross trade or business income and gains) to the lesser of (i) the capital gain net income determined by taking into account only gains and losses attributable to a trade or business or (ii) the capital gain net income.

Excess Business Loss (EBL) Example

A married taxpayer has trade or business income from Business A of $5 million and trade or business losses from businesses B and C of $15 million in 2022. Instead of being able to deduct the entire $10 million loss against other income in 2022, the taxpayer is limited to deducting only $5.54 million of the losses in 2022 ($5 million of income from business A + $540,000 threshold amount). The excess ($9.46 million) is carried forward to 2023 as a net operating loss.

Net Operating Losses Carryforward

A net operating loss (NOL) may offset up to 80% of current year taxable income; this rule has been in place since 2021. Unused NOLs may be carried forward indefinitely. A disallowed EBL is treated as a NOL carryforward in the subsequent year, subject to the NOL rules. If a taxpayer has multiple NOLs, they are applied in the order incurred, beginning with the earliest.

Net Operating Loss (NOL) Example

Continuing the example above, the taxpayer has a 2023 NOL of $9.46 million and 2023 taxable income of $10 million. The NOL can offset only 80% of the taxable income, which is $8 million. The remaining unused NOL ($1.46 million) would be carried forward to 2024.

Deductions for Capital Losses Are Limited Too

Tax-loss harvesting can be an effective way to enhance an investor’s after-tax returns. After a year in which equity markets were down 15.0% and bond markets were down 11.2%[1], investors have plenty of opportunities for harvesting losses. Strategically applying tax-loss harvesting, however, requires understanding the rules related to wash sales and the limits on how much in capital losses can be deducted in any year.

Wash Sales

The wash sale rule disallows a loss on the sale of stock or securities if a taxpayer acquires substantially similar stock or securities or a contract or option to acquire substantially similar stock or securities within 30 days before or after the date of sale or disposition. Generally, the wash sale rule applies only when the same taxpayer repurchases substantially similar stock or securities, but the loss may be disallowed if the acquisition is made by a related party. If a taxpayer sells stock or securities for a loss and then repurchases the stock or securities in their or their spouse’s IRA within 30 days before or after the sale, that loss will be subject to the wash sale rule.

The disallowed amount can be claimed when the new stock is finally disposed of, other than in a wash sale. The rule does not apply to losses from transactions made in the ordinary course of a dealer’s business of dealing in stocks and securities. The wash sale rules apply per taxpayer and not per account, so it is critical to review each taxpayer’s total portfolio.

Excess Loss Carryforward

In addition to using capital losses to offset capital gains, taxpayers can deduct up to $3,000 of capital losses against ordinary income in any given year ($1,500 for married filing separately). Any excess capital losses are carried forward indefinitely and used to offset gains or ordinary income up to the aforementioned limits in future years.

Capital Loss Carryforward Example

In 2022, a taxpayer has long-term capital gains of $40,000, short-term capital gains of $80,000, long-term capital losses of $90,000, and short-term capital losses of $70,000. The taxpayer has a net long-term capital loss of $50,000 ($90,000 – $40,000) and a net short-term capital gain of $10,000 ($80,000 – $70,000). The excess of the long-term capital loss ($50,000) over the net short-term capital gain ($10,000) is $40,000. The taxpayer can only use $3,000 of the $40,000 capital loss to reduce 2022 ordinary income. The remaining $37,000 would be carried forward to 2023 (and perhaps beyond).

Know What to Expect This Tax Season

For many taxpayers, losses will be a greater area of focus for their 2022 tax preparation and 2023 tax planning. As you seek to estimate your 2022 tax liability (or refund), it will be imperative to understand how these limitations on losses affect your specific situation. We are available to help you analyze your unique fact pattern and identify planning opportunities that can lower your tax liability going forward.



Written  by Katherine A. Walter. Copyright © 2023 BDO USA, LLP. All rights reserved.


[1] Source: S&P Dow Jones Indices. “Equity markets” represented by total returns of the S&P 500 Index. “Bond markets” represented by total returns of the S&P U.S. Aggregate Bond Index. Data as of December 20, 2022

General Tax

2023 Q1 Tax Calendar: Key Deadlines for Businesses and Other Employers

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. If you have questions about filing requirements, contact us. We can ensure you’re meeting all applicable deadlines.

January 17

(The usual deadline of January 15 is on a Sunday and January 16 is a federal holiday) Pay the final installment of 2022 estimated tax. Farmers and fishermen: Pay estimated tax for 2022. If you don’t pay your estimated tax by January 17, you must file your 2022 return and pay all tax due by March 1, 2023, to avoid an estimated tax penalty.

January 31

File 2022 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.

Provide copies of 2022 Forms 1099-NEC, “Nonemployee Compensation,” to recipients of income from your business where required.

File 2022 Forms 1099-MISC, “Miscellaneous Income,” reporting nonemployee compensation payments in Box 7, with the IRS.

File Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” for 2022. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it’s more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.

File Form 941, “Employer’s Quarterly Federal Tax Return,” to report Medicare, Social Security, and income taxes withheld in the fourth quarter of 2022. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return. (Employers that have an estimated annual employment tax liability of $1,000 or less may be eligible to file Form 944, “Employer’s Annual Federal Tax Return.”)

File Form 945, “Annual Return of Withheld Federal Income Tax,” for 2022 to report income tax withheld on all non-payroll items, including backup withholding and withholding on accounts such as pensions, annuities, and IRAs. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

February 15

Give annual information statements to recipients of certain payments you made during 2022. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient. This due date applies only to the following types of payments: All payments reported on Form 1099-B. All payments reported on Form 1099-S. Substitute payments reported in box 8 or gross proceeds paid to an attorney reported in box 10 of Form 1099-MISC.

February 28

File 2022 Forms 1099-MISC with the IRS if: 1) they’re not required to be filed earlier and 2) you’re filing paper copies. (Otherwise, the filing deadline is March 31.)

March 15

If a calendar-year partnership or S corporation, file or extend your 2022 tax return and pay any tax due. If the return isn’t extended, this is also the last day to make 2022 contributions to pension and profit-sharing plans. © 2022


Are You Expecting a Tax Refund? Consider Direct Deposit.

Are you expecting a tax refund? With tax season officially underway as of Jan. 23, 2023, the IRS is encouraging taxpayers to streamline tax filing this year by having refunds directly deposited into their bank accounts. Although some people still like to receive a paper check, they should at least consider the advantages of direct deposit. It’s the fastest way to get a refund, even when filing a paper return. And it eliminates the risk of having a paper check stolen or lost in the mail. For more from the IRS about the advantages of choosing direct deposit, click here:

Contact us with questions or schedule a meeting with one of our tax experts.