With the holiday season in full swing, it might seem like tax season is too far off to even think about. However, the Internal Revenue Service (IRS) is getting consumers ready to file their 2023 taxes early!
The agency has published resources for consumers to keep handy throughout tax season to make filing as easy as possible. The list includes changes to the tax filing system, reminders and important dates and forms you’ll need to remember throughout tax season.
Here’s a look at some of the considerations to keep in mind ahead of the 2024 tax season.
Are your documents ready?
Your tax documents are probably the most important part of the filing process. Do you have your 2023 tax forms ready?
These include W-2 forms from employers, 1099 forms from banks or other payers, 1099-NEC forms for non-employee compensation, 1099-K forms from third-party payment networks, 1099-MISC forms for miscellaneous income forms, and 1099-INT forms for any interest paid throughout the year.
To complete the tax filing process from start to finish, taxpayers need to have all of the necessary documentation on hand. Many employers wait until the start of the new year to distribute tax forms, so be sure to keep tabs on the status of these documents.
Set up direct deposit
To ensure you receive your tax refund as quickly as possible, set up direct deposit. This means you won’t have to wait for a physical check to land in your mailbox. Instead, whatever money you’re refunded will go straight into your bank account – usually much faster than it would take a check to arrive.
It’s important to note that the IRS typically tells taxpayers that their refunds will arrive in under three weeks. However, this is not always the case.
Those with more complicated tax returns, those who are missing paperwork, or those with suspected errors or fraud may take longer to process refunds.
Claiming certain tax credits can also delay your tax refund – such as the Additional Tax Child Credit or the Earned Income Tax Credit. The IRS holds these refunds until at least mid-February, so taxpayers who claim these credits should be aware that their refunds may take a bit more time to reach them.
Has your tax status changed?
Several major life events can change your tax status or change your eligibility for certain credits. Getting married, having a child, getting divorced, going to college, buying a home, and more can affect your filing status.
In these cases, consumers should look into different tax credits, including the clean vehicle tax credits, home energy tax credits, child tax credits, and more.
1099-K reporting is delayed
Typically, consumers are issued a 1099-K form as a report of payments for goods or services during the year from credit, debit, or stored value cards; or, payment apps or online marketplaces.
This could range from paying rent on a platform like Venmo, selling tickets on a platform like TicketMaster, selling goods on Etsy or Facebook Marketplace, and more.
After widespread confusion from tax professionals, payment services, and taxpayers alike, the IRS has determined that reporting for these transactions is delayed another year.
Taxpayers will only be required to report this supplemental income if they made over 200 transactions or earned over $20,000 in such transactions in 2023. Starting in 2024, consumers will be required to import income over $5,000 in such transactions.
The official deadline to file 2023 taxes is Monday, April 15, 2024. Consumers can create an account with the IRS to request tax transcripts, view or apply for payment plans, see digital copies of IRS notices, and more to prepare for filing.
Photo Credit: Consumer Affairs News Department Images
Posted: 2023-12-12 11:46:31
