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Taxpayer Letter – December 2023

Dear Client:

Thank you very much for your continued business.  We appreciate the trust and confidence you have placed with our firm and look forward to working with you in 2024.

We are pleased to announce two new additions to our staff during the 2023 year.  Todd Burris is a graduate of the Citadel and is currently studying accounting at Liberty University.  Bri Thomas graduated from Virginia Tech with a Bachelor’s of Science in Mathematics.  We are very excited to have both of these professionals join our team.

Please let this letter serve as a reminder to get your work into our office early this year.  In previous tax seasons as the April 15th deadline drew near, the waiting time for us to process tax returns has approached four weeks.  We appreciate your patience and understanding during this very busy time as we give each tax return all the time and attention it deserves. 

Congress passed an enhanced retirement related savings package in late December 2022 before adjourning for the year.  This law is commonly referred to as “Secure 2.0” and includes over 90 provisions with effective dates spread out over the next 5 years.  Here is a brief summary of some of the 2023 provisions that could impact our clients:

  • The Required Minimum Distributions – the RMD beginning age was increased to 73 from 72 for owners of traditional IRAs, 401(k)s and other plans. If 2023 is your first RMD year, you have until April 1, 2024 to take the RMD.  However, please remember if you decide to defer this first payout until next year, doing so means you will have to take two distributions in 2024.  One in April for the 2023 RMD and another by December 31st for the 2024 RMD.
  • The excise tax penalty for account owners who fail to take RMDs was lowered to 25% from 50%. In addition, the penalty goes down to 10% if the failure is corrected in a timely manner.
  • Distributions from 529 Plans – up to $10,000 in leftover funds in a child’s 529 plan can now be withdrawn tax free to help pay off some of the beneficiary’s college loans. Starting in 2024, any remaining 529 funds can be rolled over tax free to a beneficiary’s Roth IRA provided that the account has been open for at least 15 years. 

For our clients considering home improvements, “go green” to claim one of two eligible tax credits:     

  • The residential clean energy property credit is equal to 30% of the cost of alternative energy systems that rely on a renewable energy source – solar panels, solar-powered water heaters, geothermal heat pumps, wind turbines and more.
  • The smaller energy-efficient home improvement credit applies to certain types of insulation, boilers, central air-conditioning systems, water heaters, heat pumps, exterior doors and windows and the like that meet certain energy efficiency ratings. This credit for 30% of the cost of these eco-savings upgrades is now available for up to $1,200 each year.


Please remember that we are here to assist you with any tax and accounting needs year-round, not just during tax season.  All of us at Cole, McIlwain & Company, P.C. hope you had a wonderful holiday season and we look forward to working with you in the New Year!