As tax filing season approaches, getting your ducks in a row early can help you avoid stress, save time, and prevent mistakes. It’s always a good idea to browse the IRS website and catch up with any new reporting requirements.
Not sure where to begin? Here is an overview of what you need to prepare for the 2023 tax filing deadline of April 18, 2023.
Gather Your Records
A clear and well-organized record system is the most effective remedy for tax mistakes. When you keep detailed records year-round, tax season becomes much easier. For example, if your business processes digital assets through a third-party app, you should maintain an orderly transaction log.
What you need to prepare for 2023 filing may include:
- Form W-2 (Wage and Tax Statement) from your employer
- Forms 1099 for independent contractors (like 1099-NEC, nonemployee compensation)
- Form 1099-K for third-party app payments
- Records of charitable contributions
Complete and accurate tax records will help you reduce errors, avoid processing delays, and possibly speed up your tax refund.
Secure Online Accounts and Direct Deposits
Setting up an online IRS account gives you easy and secure access to all your tax information, such as payment history, tax returns, and important notices. You can also verify that the IRS has your correct name, address, and routing number for direct deposit refunds. If your online account includes the wrong details, contact the IRS (through a written statement or by phone) and provide your updated information to avoid any tax return processing delays.
Electronic filing and choosing the direct deposit option may help you get your tax refund more quickly. Direct deposits are both faster and safer than paper checks. Typically, the IRS will deposit the refund in your bank account, but you may also receive your refund through a check or a prepaid debit card.
A Few Points to Keep in Mind for Tax Season 2023
The upcoming tax season is introducing some changes for filers. For instance:
- For the 2022 tax year, you must file Form 1099-K if you used a third-party app to receive payments for goods or services worth over $600 in 2022
- The government is phasing out most of the tax relief measures it implemented during the COVID-19 pandemic. The current changes will influence Earned Income Tax Credit, the Child Tax Credit, and more. Visit the IRS website to find out which tax credits you may qualify for.
- Because most tax credits are reverting to their pre-pandemic levels, tax refunds may be lower in 2023 than they were in 2022.
Why Correct Tax Returns Are Valuable
Tax filing is often complex, and non-professionals handling their own taxes may make mistakes. While you can correct errors by filing an amended tax return, oversights can cost you time and possibly money. A mistake on your tax filing documents may delay your tax refund or even attract an IRS audit.
Depending on your income structure, available time, and knowledge of IRS requirements, it may make sense to outsource your tax preparation to a professional.
Working with a competent tax consultant may help you:
- Discover ways to lower tax expenses
- Make sure your tax return includes correct and complete information
- Avoid costly penalties and stressful audits
Levy & Associates: Taking Stress Out of the Tax Season
Changing tax regulations and shifting IRS forms can be a major headache. At Levy & Associates, we help you handle your taxes in an efficient, reliable, and hassle-free way. We offer comprehensive tax management services, from helping you gather what you need to prepare for 2023 filing to resolving complex tax problems like IRS audits, penalties, and liens.
Call 800.TAX.LEVY or contact us online to learn more about our tax services.