The Internal Revenue Service has announced the increases in the annual gift tax exclusion and the lifetime estate and gift tax exemption for calendar year 2023.

The annual gift tax exclusion allows taxpayers to transfer gifts to unlimited donees without experiencing gift taxes up to a designated annual amount. The lifetime estate and gift tax exemption provides the limit for lifetime gifts as of the date of the gift or date of death before incurring a gift or estate tax liability.

For the 2023 tax year, the annual gift tax exclusion is increased by $1,000 to a total of $17,000. The exclusion covers gifts an individual makes to each donee per year. Married taxpayers can combine their gift tax exclusion as they can share their two annual exclusions. For example, married taxpayers with three children could potentially transfer $34,000 a year to each child or a total of $102,000 without incurring any gift taxes.

The annual gift tax exclusion is also an important consideration for estate planning purposes. Taxpayers can make gifts up to that amount before utilizing any of their lifetime estate and gift tax exemption. The value of any gifts in excess of the annual gift tax exclusion would then be subtracted from the lifetime exemption. As the lifetime exemption gets used over the taxpayer’s lifetime, the amount that can be excluded from the taxable estate upon death also decreases. For 2023, the lifetime exemption will increase by $860,000 to $12,920,000. The total available to a married couple will be $25,840,000 in 2023.

If you have any questions regarding estates, gifts, or any topics in this area, give us a call at (401)-921-2000 or fill out our online contact us form to get started.

Thanks to an obscure Massachusetts law passed back in 1986, Massachusetts taxpayers will be eligible to receive a tax refund starting November 1, 2022. Chapter 62F was a measure passed by Massachusetts residents in 1986 that required the state to refund a certain percentage of collected taxes if the state collected more taxes than what is considered the annual cap tied to wage and salary growth throughout the state. Triggered only once before in 1987, 2022 marks the second time this measure has been enacted in over thirty years.

For tax year 2021, the Commonwealth has collected an estimated $3 billion in excess tax revenue that will be distributed back to the taxpayers. The amount will be 14.035% of the taxpayer’s tax liability. Eligible taxpayers include resident and non-resident individuals as well as trusts and estates.

No action on the end of the taxpayer is required to receive the refund. If you are eligible, then you will receive the refund automatically either through check or direct deposit based upon your 2021 tax return. If you have not filed your 2021 tax year return, then you have until September 15th, 2023, to be eligible for the refund.

These refunds should be rolling out at the beginning of November for most taxpayers who filed before April 18th of 2022. If you filed on extension, your refund might be delayed compared to other taxpayers.

A quick and easy refund estimator is available at the website if you would like to see what you could receive with your refund.

More Information: Refund Estimator & Chapter 62F Q&A: Chapter 62F Taxpayer Refunds |

If you have any questions on the above and how it applies to you, please call us at 401-921-2000, or reach us through email or complete our online contact form.

Governor Dan McKee recently announced a new relief program aimed at providing some financial relief to Rhode Island families during these hard economic times. The 2022 Child Tax Rebates are a part of the State’s FY23 budget that was signed by the Governor in June, with the intention of building on the State’s economy and helping families who are in need. The new rebate payment will be $250 per qualifying child, up to a maximum of three children (max rebate of $750), that will be issued to eligible taxpayers as early as October 2022 based upon when the taxpayer(s) filed their 2021 RI Personal Income Tax return.

To qualify for this rebate, a 2021 Rhode Island Personal Income Tax return must have been filed on or before October 17, 2022, with an AGI limitation of $100,000 or less for taxpayers with a filing status of Single, Married Filing Separately, Head of Household, or Qualifying Widow/Widower, and an AGI limitation of $200,000 or less for those whose filing status was Married Filing Jointly. A qualifying child dependent must have been eighteen years of age or under as of December 31, 2021 to qualify for the rebate. Along with the above requirements, a taxpayer must be “domiciled” in the state of Rhode Island as per their 2021 RI-1040 or RI-1040NR to be eligible.

The 2022 Child Tax Rebate will be an automatic roll-out with no need to apply if a 2021 RI Personal Income Return has been filed for the year. If you filed by August 31, 2022, your rebate can be expected to be issued starting in October of 2022. Those on extension who file by October 17, 2022 will have their rebates issued starting in December 2022. The rebate will be mailed to your mailing address based upon your Rhode Island Personal Income return, with no direct deposit options available for these rebates. To check the status of your Child Tax Rebate, please use the website and enter your Social Security Number (SSN), your Federal Adjusted Gross Income (AGI) from Line 1, and your Filing Status. The rebate is expected to support close to 115,000 Rhode Island families across the state in the coming months.

More Information

If you have any questions, please reach out via email, give us a call at (401) 921-2000, or fill out our online contact us form.

The cash basis or accrual basis relates to how income and expenses are accounted for; hence these are referenced as methods of accounting. This information is used for a variety of reasons, such as the preparation and reporting of income tax returns, to obtain financing and completion of credit applications, preparation of a business valuation and in family law matters to name a few; therefore, it is important to understand their differences and limitations.

Generally, the cash basis of accounting is utilized by individuals and small businesses. The accrual basis of accounting is most often utilized by larger businesses; however, small businesses may also utilize the accrual basis, if they so choose. The basis of reporting (cash or accrual) will determine when income and expenses are recognized to compute a business’ profit for the year.

With the cash basis of accounting, income is recorded when cash is received, and expenses are recognized when cash is paid. In contrast, the accrual basis of accounting records income when it has been “earned” and not when the cash is received. Expenses are recorded when they “occur” and not when cash is paid. The main difference between cash and accrual basis accounting lies in the timing of when income and expenses are recognized.

So why does this matter? Recognizing income and expenses under either basis will result in a different income and profit calculation. These differences, if significant, could have a significant financial impact on a business, individual, or both. Businesses are most often valued based upon their income and/or profits – therefore, it is extremely important to be aware of the accounting method relied upon. An individual’s income is most often computed based upon tax returns. Other sources of income may not be reported on an individual’s cash basis tax return.

Both methods of reporting have different purposes and result in different outcomes. To ensure that the relied upon basis of reporting is consistent with its intended purpose (i.e., valuation, marital litigation), it is prudent to consult with an experienced professional.

If you have any questions, please reach out via email (, give us a call at (401) 921-2000, or fill out our online contact us form.