As the IRS gears up to start accepting and processing 2023 federal income tax returns on Monday, taxpayers are urged to take note of essential tips to streamline the filing process and avoid potential penalties.
Here are eight key considerations to make the tax preparation and filing experience as seamless as possible.
Tax Filing Tips
Be Mindful of Deadlines: The general filing deadline is April 15, with exceptions for residents in Maine and Massachusetts (April 17) due to state holidays.
Taxpayers in federally declared disaster areas may have extended deadlines. It’s crucial to pay any remaining taxes owed by the deadline to avoid late payment penalties.
Refer to Last Year’s Return: Reviewing your 2022 tax return provides a solid starting point to identify the documents needed for this year’s filing. Digital record-keeping sources should be revisited to check for 2023 tax forms.
Assess Life Changes in 2023: Major life events, such as marriage, divorce, or relocation, can impact your tax liability. Verify any significant changes in your life that might affect your tax situation.
Small Business or Side Gig?: If you received payments through payment apps like Venmo for business transactions, check for a 1099-K. Ensure accurate reporting, distinguishing business transactions from personal ones.
Health Insurance Premium Tax Credits: Individuals who received advanced premium tax credits must fill out Form 8962, using information from Form 1095-A.
Monitor Congress for Tax Break Updates: Stay informed about potential changes in child tax credits and deductions for small business owners as lawmakers finalize a bipartisan tax package.
Expedite Your Refund: For those expecting a refund, the IRS typically issues it within 21 days. Electronic filing and opting for direct deposit enhance the speed of refund processing.
Explore Free Filing Options: Individuals with an income of $79,000 or less may qualify for free federal tax filing through select software providers or the IRS’s pilot program called Direct File, available in specific states.
As taxpayers prepare to navigate the intricacies of the tax season, adherence to these guidelines can contribute to a more efficient and stress-free filing experience.