Tax season started on Monday and many people filed their taxes. US tax refund —especially if you are doing it for the first time—can be a daunting task that is often left until the last minute. But if you want to avoid the stress of looming deadlines, start organizing as soon as possible.
Whether you do your taxes yourself, go to a tax clinic, or hire a professional, navigating the tax system can be complicated and stressful. Courtney Alev, consumer finance advocate at Credit Karma, recommends cutting yourself some slack.
“Breath. Take your time and set it for an hour or do it over the weekend. You’ll find it’s a lot simpler than you think,” Alev said.
If the process is too confusing, there are many free resources to help you complete the process.
Here are a few things you need to know:
When is the tax filing deadline?
Taxpayers have until April 15 to file their 2023 tax returns.
What do I need to file a tax return?
The documents required may vary depending on the individual case, but here is a general list of what everyone will need:
—Social Security Number
—W-2 form (if employed)
—1099-G, if you are unemployed
—Form 1099 (if self-employed)
—Savings and investment records
—All qualified deductions, such as education expenses, medical expenses, charitable contributions, etc.
—Tax credits such as child tax credit, retirement savings contribution deduction, etc.
For a more detailed list of documents, please visit: National Tax Service website.
Tom O'Saben, Director of Tax Content and Government Relations National Association of Tax Professionals, We recommend gathering all your documents in one place before you start filing your taxes, and even keeping last year's documents if your financial situation has changed dramatically.
O'Saben also said taxpayers Identity protection PIN number We work with the IRS to prevent identity theft. Once you create a number, the IRS will ask for it when you file your tax return.
How do I file my taxes?
You may submit one of the following: Pay taxes online or on paper. However, there is a significant time difference between the two options. While it can take up to six months for the IRS to file your documents, electronic filing reduces that time to three weeks.
What resources are there?
The IRS offers the following benefits to people making less than $79,000 per year: Free Guided Tax Preparation It does the math for you. If you have questions while completing your tax forms, the IRS provides: Interactive Tax Assistant A tool that can provide answers based on your information.
Beyond famous companies such as turbo tax and H&R Block also allows taxpayers to hire licensed professionals, such as certified public accountants. The IRS provides: tax preparer directory All over America.
that much The IRS also funds two types of programs. Places that offer free tax help: VITA and Tax Counseling for Seniors (TCE). People who make less than $64,000 per year, have a disability, or have limited English proficiency are eligible to participate in the VITA program. Anyone age 60 or older is eligible to participate in the TCE program. The IRS has a site To find organizations hosting VITA and TCE clinics
If you have tax problems Clinics nationwide This may help you resolve these issues. Typically, these tax clinics also offer services in other languages, including Spanish, Chinese, and Vietnamese.
How can I avoid errors on my tax return?
Many people are afraid that if they make a mistake they will get in trouble with the IRS. Here's how to avoid some of the most common problems:
—Double-check the name on your Social Security card.
When working with clients, O'Saben always asks them to bring their Social Security card to double-check their number and legal name. This may change when you get married.
“You may have changed your name, but Social Security hasn’t changed your name,” O’Saben said. “If your Social Security number does not match the first four letters of your last name, your return will be rejected and processing will be delayed.”
—If you have opted out of receiving paper mail, retrieve your tax statement.
Many people want to opt out of snail mail, but doing so may also include tax documents.
“Just because you don’t receive anything in the mail doesn’t mean there isn’t a document of information you need to know and report accordingly,” O’Saben said.
—Make sure you report all your income.
If you had more than one job in 2023, you will need a W-2 form for each.
What about the child income tax deduction?
Earlier this month, Congress announced a bipartisan agreement. Strengthens the current child tax credit. The current tax credit is $2,000 per child, but the refundable amount is $1,600. The bill would gradually increase the maximum refundable child tax credit to $1,800 for 2023 tax returns, $1,900 the following year, and $2,000 for 2025 tax returns.
According to the Center on Budget and Policy Priorities, if the agreement passes, about 16 million low-income children would benefit from the expanded child tax credit. Lawmakers are hoping to move this bill through as quickly as possible.
What happens if I make a mistake?
Mistakes happen, and the IRS takes a different approach in each case. Typically, the IRS conducts an audit if there are mistakes or omissions in your tax records, Alev said. An audit means the IRS will request additional documentation.
“In general, they are very understanding and willing to work with people. Even if you enter the wrong fields, you will not be arrested,” Alev said.
What happens if I haven't filed in several years?
you You can file your taxes late And if you're due a refund, you can still get it. If you haven't filed in several years and owe money to the IRS, you may be subject to a penalty, but the IRS can work with you to manage a payment plan.
How can I avoid scams?
Tax season is the best time of the year. It's tax fraud, O'Saben said. These scams can take place over the phone, text, email or social media. The IRS does not use these methods to contact taxpayers.
Sometimes tax preparers commit fraud, so it's important to ask lots of questions. For example, if your tax preparer tells you you'll get a larger refund than you received the previous year, that could be a red flag, O'Saben said.
If you don't know what your preparer is doing, get a copy of your tax return and ask questions about each item.
How long should I keep a copy of my tax return?
It's always a good idea to keep records of your tax return in case the IRS audits something you filed years ago. O'Saben recommends keeping a copy of your tax return for up to seven years.
How do I apply for a tax extension?
If you don't have enough time to file your tax return, you can file your tax return. enlargement. However, it is important to remember that the extension is for filing taxes, not for paying taxes. If you owe taxes, you must pay the estimated amount before the due date to avoid paying penalties and interest. Even if you expect to receive a refund, you will receive it when you file your taxes.
If you request an extension, you can file your taxes by October 15th. You can apply for an extension through your tax software or your preferred agent. IRS Free File Via tools or mail.
What happens if I file my taxes late?
If you miss your tax deadline and don't file for an extension, you may face several penalties. If you miss the deadline, Penalties for failure to submit. According to the IRS, this penalty will be 5% of the unpaid tax for each month your tax return is late.
If the tax due is not paid before the tax due date, Unpaid fines. Interest will also be charged on taxes and penalties owed. If you are eligible for a refund, there will be no penalty and you will receive a tax refund. If you have special circumstances that prevent you from filing or paying your taxes on time, you can: Eliminate or reduce fines.
You can apply if the amount of tax you owe is too high. Payment Plan. Payment plans allow you to pay over time.
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