Maximizing Your Savings: The Top Wisconsin Tax Laws to Take Advantage of in 2023
Wisconsin residents have a lot to look forward to when it comes to filing their state taxes in 2023. With the new tax laws, there are a variety of deductions and credits available that can save you money and make the process of filing your taxes less stressful.
Here at Fortifi Bank, we want to make sure our customers are aware of the best tax laws to take advantage of when filing their state taxes this year. Below are some of the key deductions and credits to look out for:
1. Homestead Credit
If you own a home in Wisconsin and your income falls within certain limits, you may be eligible for the Homestead Credit. This credit can help lower your property taxes and is available to both renters and homeowners. To qualify, you must be a Wisconsin resident and have lived in the state for at least one year prior to the date of the credit.
2. Renter’s Credit
If you rent your home, you may be eligible for the Renter’s Credit, which can help lower your income taxes. To qualify, you must be a Wisconsin resident and your income must fall within certain limits. This credit is available to both homeowners and renters, and it can be claimed on your state income tax return.
3. Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a federal credit that can also help lower your state income taxes. It is available to those who have earned income, such as wages or self-employment income, and whose income falls within certain limits. This credit can be substantial and can help to offset the burden of taxes on low-income earners.
4. Property Tax Credit
The Property Tax Credit is available to Wisconsin residents who own their own home and have a total income within certain limits. The credit is based on the amount of property taxes paid during the year and is calculated on the Wisconsin state income tax return.
5. Business Tax Credits
Wisconsin offers a variety of business tax credits to help small businesses grow and succeed. For example, the Small Business Development Tax Credit is available to small businesses that are expanding or creating new jobs. Additionally, the Manufacturing and Agriculture Tax Credit is available to companies in the manufacturing and agricultural sectors.
6. New Additional Child and Dependent Care Credit
Effective for the tax year 2022, Wisconsin will provide a new credit equal to 50% of the Federal Child and Dependent Care Credit. Wisconsin had no previous Child Care Credit.
7. New Capital Loss Deduction and Carryforward
Beginning with tax year 2023, Wisconsin will now allow a $3,000 deduction against ordinary income for capital losses in that tax year and in carryforwards, up from $500 per year previously. This now matches the Federal deduction for current year capital losses and carryforwards.
It’s important to realize that Wisconsin tax law does not always conform to Federal tax law. When this happens, you must make an adjustment to your Wisconsin tax return to either add income that was tax deductible on the Federal return.
It’s worth noting that it’s always wise to consult with a tax expert to verify what deductions or credits apply to your specific situation. Remember, that laws and regulations are subject to change and professional guidance can help ensure compliance and minimize risk.
At Fortifi Bank, we pride ourselves on providing our customers with the tools and resources they need to achieve financial success. If you have any questions about how to take advantage of these Wisconsin tax laws when filing your state taxes in 2022, please don’t hesitate to reach out to us. We would be more than happy to help.
Meet Megan M. Heintzkill, CFP®, CDFA® – the Director of Financial Planning at Fortifi Bank. As a Certified Financial Planner® and a Certified Divorce Financial Analyst, Megan has the expertise and experience needed to help individuals and families navigate their financial lives. With her extensive knowledge of the financial industry, Megan is dedicated to providing personalized and comprehensive financial planning services to her clients.