Financial Planning Insights

Timely Tax Tips

Clarissa R. Hobson, CFP®
Director of Financial Planning

Updated as of February 13, 2023, reflective of new guidance surrounding taxable treatment of special tax refunds or payments.

Tax season is upon us again, so we have compiled a brief list of tips to assist in your tax planning efforts. As a reminder, the deadline to file your 2022 taxes is April 18, 2023.


Tax Forms:

Schwab produces 1099s in batches, and yours will be available shortly (if it is not already). Once available, 1099s can be downloaded by logging into your Schwab account or, if you have elected to receive hard copies, they will be mailed to you. In some instances, companies may update their numbers, in which case custodians (such as Schwab) must issue a corrected 1099 reflecting those changes.

Tip: Filing your taxes closer to the tax deadline will reduce the likelihood of having to amend your tax returns. Make sure to communicate with your tax preparer to find the right timeframe for filing your returns.


Secure Act 2.0 – RMD Age:

The IRS has made several changes to the Required Minimum Distribution (RMD) Age, as part of a phased approach to increasing the age to 75 by 2033.

  • If you were born prior to 1/1/1951, you have already begun taking RMDs and there is no change to your RMD schedule.
  • If you were born between 1/1/1951 and 12/31/1959, you must begin taking RMDs in the year in which you turn 73 (or by April 1st of the following year).
  • If you were born after 1/1/1960, your RMDs will begin at age 75.


IRA & Roth IRA Contribution Deadlines:

If you are planning to make Traditional or Roth IRA contributions for the 2022 tax year, contributions may be made up until the tax deadline on April 18th. Below are the contribution limits for 2022 and 2023:

Tax Year 2022: $6,000 / $7,000 if you’re age 50 or older.

Tax Year 2023: $6,500 / $7,500 if you’re age 50 or older.


Qualified Charitable Distributions:

If you made a Qualified Charitable Distribution (QCD) from your IRA in 2022, remember to inform your tax preparer of the amount you gave in QCDs and provide any necessary documentation.

Tip: 1099-Rs only show gross distributions from IRAs; communicating this information will ensure your QCDs reduce your taxable income.


Special Tax Refunds or Payments:

On February 10th, the IRS released additional clarity on the taxability of special state tax refunds and payments. The IRS determined that state tax payments issued in 2022 related to general welfare and disaster relief will not be taxable at the federal level. This means that taxpayers in the following states do not need to include these state payments as income on their 2022 federal tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is also included in this group on a case-by-case basis.

Additionally, taxpayers in Georgia, Massachusetts, South Carolina, and Virginia who received a refund of state taxes paid and claimed the standard deduction, or who itemized but did not receive a tax benefit, do not need to include the refund as income for federal tax purposes.

We recommend consulting your tax professional and reviewing the IRS news release for additional details:


Maintaining Records and Sensitive Documents:

Generally speaking, you only need to keep past years’ tax returns for three years from the date you filed your original return. However, we recommend maintaining your tax records for ten years and confirming that aligns with the recommendations of your tax professional.

We hope you find these tips helpful as we head into tax season. As always, please contact your Transform Wealth advisor with any questions; we stand ready to assist you.


This document is for informational purposes only. It is educational in nature and should not be considered a recommendation of Transform Wealth’s investment management and financial planning services, strategy or any particular product in any jurisdiction. Your investment goals and objectives are unique so you are encouraged to consult with a professional before making any financial planning, tax planning, and investment decisions.