2023 Tax Preparation and Filing

Okay, there’s no time to waste. You’ve put off doing your taxes and asking for an extension. But don’t worry, the process for asking for an extension until Oct. 16 is simple and easy.

If you are going to mail your request for an extension, download IRS form 4868 here and print it out.

On the left-hand side enter your full name, address, Social Security number and your spouse’s Social Security number.

On the right side, on line four estimate your total tax liability for 2022. If you have one job and expect a refund, it’s simple. Enter the total federal tax withholdings from you’re W-2.

If you had a side hustle that produced income, add the amount of estimated tax you paid during the year to the amount entered on line four. Enter the same number you put on line four to line five.

On line six, enter $0, since you believe your withholdings and estimated payments will cover your tax liability. Enter $0 on line seven. Check the appropriate boxes on lines eight and nine and you’re ready to mail the form. You can find the correct address for mailing it on page four of form 4868.

If you think you’ll owe additional taxes

While the extension allows you to delay filing your taxes it doesn’t allow you to delay paying your taxes. If you think you will owe taxes you should send a check for the amount of the additional tax. If you overpay, you’ll get a refund.

Line four, the amount of what you expect your tax will be, will be bigger than line five, the amount you’ve already paid. Subtract line five from four and the difference, entered on line six, is what you will send the IRS, along with form 4868.

You can also file for an extension electronically by using Free File at IRS.gov.

While taxpayers have less than a week to file their 2022 taxes, the Internal Revenue Service (IRS) is now asking taxpayers to think about whether they’ve claimed their refunds from 2019. 

According to the IRS, there are roughly $1.5 billion in unclaimed tax refunds from 2019, and time is running out for taxpayers to claim theirs. The deadline to claim the refunds is July 17. 

On top of the potential return, the IRS recommends that taxpayers file their 2019 taxes because they may also be eligible for the Earned Income Tax Credit. In 2019, the max credit was over $6,500. 

“The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds,” said Danny Werfel, IRS commissioner. “We want taxpayers to claim these refunds, but time is running out. People face a July 17 deadline to file their returns. We recommend taxpayers start soon to make sure they don’t miss out.” 

How to file

Though 2019 was several years ago, taxpayers still have time to file their taxes and claim their refunds. The IRS recommends starting sooner rather than later to avoid missing out on the money. The agency estimates that the midpoint for unclaimed returns from 2019 will reach nearly $900. 

For starters, taxpayers should have all of their tax documents from 2019 on hand and ready to file. These forms are also available by request from banks, employers, and any other sources of income. For those who can’t track down missing W2s, 1099s, or other tax forms necessary to file, you can request a wage and income transcript through the IRS’ website. 

Once those items are secured, taxpayers can follow the same process that they normally would when filing their taxes. 

Why is so much money left unclaimed? 

The IRS explained that because of the COVID-19 pandemic, taxes weren’t exactly top of mind for most Americans. Typically, if taxes aren’t filed within three years, any unclaimed refunds go back to the U.S. government. However, the COVID-19 pandemic extended that three-year deadline, which is now coming up in July. 

“With the pandemic taking place when the 2019 taxes were originally due, people faced extremely unusual situations,” Werfel said. “People may have simply forgotten about tax refunds with the deadline that year postponed all the way into July. We frequently see students, part-time workers, and others with little income overlook filing a tax return and never realize they may be owed a refund. We encourage people to review their records and start gathering records now, so they don’t run the risk of missing the July deadline.” 

The IRS also explained that to be eligible for your 2019 tax refund, you must also file taxes for 2020 and 2021. 

The Internal Revenue Service (IRS) opened the tax filing season back in January, and now the April 18 deadline to file is quickly approaching. 

With just a few days left, it’s crunch time for taxpayers to get all their ducks in a row to make sure their taxes are filed – or take the right steps to file an extension. Below are some tips and resources from the IRS for taxpayers to prepare for the upcoming deadline. 

Preparing for filing

For taxpayers who have already filed their taxes, or those who are still gathering all of their documents, there are a number of resources to keep on hand throughout tax season and beyond. 

• Saturday hours at Taxpayer Assistance Centers: Earlier this tax season, the IRS announced that Taxpayer Assistance Centers would expand to offer services to taxpayers on Saturdays. These special Saturday hours are available to taxpayers free of charge and with no appointment required. There are two remaining Saturdays available for those who may still have questions about filing their taxes: April 8 and May 13 from 9:00 am to 4:00 pm. Taxpayers can come with any questions about their IRS accounts or current filing documents. 

• Interactive Tax Assistant: For those who may not want to go to a Tax Assistance Center, this virtual service allows taxpayers to ask their tax questions to experts virtually. This service can help with everything from finding deductions, determining your filing status, claiming dependents, and more. 

• IRS Free File: This software from the IRS allows taxpayers who qualify to file their federal taxes (and some state taxes) for free. The guided tax prep software takes taxpayers through the paces of filing their taxes, including finding deductions, exemptions, and credits. 

• Online IRS Account: Having an active online account with the IRS can be helpful for consumers to keep track of all of their pertinent tax information – from this year and years past. This will include past payments, full tax return transcripts, and adjusted gross income history. 

• Find a Tax Professional: For taxpayers who may not know where to turn to get their taxes filed by an expert, the IRS website has tools available to help them find a trusted, reliable source. 

• Where’s My Refund: If you’ve filed your 2022 taxes already this year, this tool can help you track down your refund. Taxpayers should give the IRS around 24 hours to process their returns before tracking information is available. 

Do you need to file an extension?

Though the tax filing deadline is quickly approaching, any taxpayer can file an extension with the IRS. The Free File tool also allows taxpayers to electronically fill out the extension request form for free, bumping the deadline to file to October 15. 

Taxpayers in certain states – California, New York, Mississippi, and Arkansas – have exemptions to file later due to storms and other natural disasters. To see which areas specifically qualify for these extensions, taxpayers can visit the Tax Relief in Disaster Situations page. 

It’s also important for taxpayers to know that an extension to file doesn’t equate to an extension to pay taxes. To avoid paying interest or penalty fees, taxpayers should ensure that all payments are made on time. 

To also request extensions for tax payments, the IRS recommends that taxpayers complete Form 4868 or select “extension” as their payment method when going to make an online payment. Taxpayers can also create payment plans with the IRS to make their tax payments in increments over time. 

Earlier in tax season, the Internal Revenue Service (IRS) revealed how victims of storms across the state of California may be eligible for tax relief and filing extensions. 

Now, the agency is reporting that taxpayers in two more states – Mississippi and New York – may be eligible for similar relief programs and filing extensions. 

What taxpayers in New York should know

Following snowstorms between December 23-28, 2022, taxpayers living in Suffolk, Erie, Niagara, Genesee, or St. Lawrence counties, or those who operate businesses in those areas, are eligible for tax relief. 

The IRS is pushing back the filing deadline for taxpayers and business owners in these areas from April 18, 2023, to May 15, 2023. This goes for business returns, personal income tax returns, estimated tax payments, quarterly payroll and excise tax, and penalties on payroll and excise tax deposits. 

Under this relief plan, taxpayers will also have until the new May 15 deadline to contribute to their health savings accounts or IRAs. 

While the IRS has made it clear that extensions to file taxes don’t typically come with an extension to pay taxes, that isn’t the case for storm victims in these areas. Any taxes owed during this period will also now be owed by the May 15 deadline. 

Taxpayers won’t need to take any additional steps to get the extension. Those filing with addresses that fall within the affected areas will automatically receive relief for filing before the May 15 deadline. 

However, for those who may need even more time to file, the IRS recommends that they request an extension. Requesting extra time can be done online before April 18; those requesting an extension after April 18 and before May 15 must do so by mail. 

What Mississippi taxpayers should know

Mississippi taxpayers who experienced severe storms and tornadoes on March 24 and 25 now have until July 31, 2023, to file their 2022 taxes. The affected counties include: Monroe, Carroll, Sharkey, and Humphreys, and the extension is valid for both personal taxpayers and business owners. 

The IRS has granted Mississippi taxpayers many of the same relief options as those affected by storms in New York, except with a later deadline. This means that residents and business owners of the affected areas in Mississippi have until July 31 for filing: 

• Quarterly estimated tax payments

• Quarterly payroll and excise tax returns 

• IRA and health savings account contributions 

• Personal tax returns

• Business tax returns 

• Tax payments originally due during this period 

Similarly, these relief options will be automatically taken into consideration based on taxpayers’ addresses when filing. However, should taxpayers be incorrectly penalized for filing late, the IRS recommends they contact the agency immediately to have the penalty removed. 

Taxpayers in both New York and Mississippi can refer to the Tax Relief in Disaster Situations page to see a full list of locations eligible for these extensions. 

This tax season has been full of scams, and as the April 18 filing deadline is approaching in just a few weeks, the Internal Revenue Service (IRS) is rounding up 12 of the worst ones, known as the “Dirty Dozen.” 

One such scam that taxpayers should be aware of involves identity theft. The IRS is warning taxpayers to be mindful of any offers they receive to help them set up online accounts for the government website; these are almost always scammers trying to steal personal information. 

“Scammers are coming up with new ways all the time to try to steal information from taxpayers,” said Danny Werfel, IRS commissioner. “An online account at IRS.gov can help taxpayers view important details about their tax situation. But scammers are trying to convince people they need help setting up an account. 

“In reality, no help is needed. This is just a scam to obtain valuable and sensitive tax information that scammers will use to try stealing a refund,” he continued. “People should be wary and avoid sharing sensitive personal data over the phone, email, or social media to avoid getting caught up in these scams.” 

Following the same script

As Werfel explained, these scams typically follow the same kind of script. Taxpayers will often see third-party ads, or be contacted directly by a third party – online, over the phone, or through email -- with the goal of “helping” them create an online account on the IRS website. 

For anyone setting up one of these accounts, personal information is necessary: Social Security numbers, email addresses, photo IDs, etc. Once a taxpayer accepts “assistance” from the scammer, the scammer then gets access to all of this personal information. It’s not uncommon in these situations for scammers to sell taxpayers’ personal data to other scammers.  

This is a risk for a few reasons. The scammers can use your personal information to steal your tax refund or steal your identity to open credit cards or apply for loans. 

However, the IRS wants taxpayers to know that creating these online accounts doesn’t require any assistance. The website will automatically direct users to complete the process step-by-step, and taxpayers have all of their own personal data to complete the required fields. 

Report scams

While there has been no shortage of scams this tax season, the IRS is encouraging taxpayers to report any encounters they experience with scammers. 

Phishing activity can be reported to phishing@irs.gov, or to the Treasury Inspector General for Tax Administration at 1-800-366-4844. 

Taxpayers can also complete Form 14242 (Report Suspected Abusive Tax Promotions or Preparers) and mail it to the Internal Revenue Service Lead Distribution Center, Stop MS 5040, 24000 Avila Road, Laguna Niguel, California, 92677.

The Internal Revenue Service (IRS) has worked to make the tax filing process easier and more efficient for consumers this year. Now, the agency announced it will expand its efforts in scanning digital tax forms. 

“This expansion of scanning is another milestone for the IRS as we work to transform the agency,” said Doug O’Donnell, acting IRS commissioner. “We anticipate expanding scanning of more paper returns in the near future, saving time and creating efficiencies for taxpayers, the business community, as well as tax professionals and the IRS.”  

Starting with Form 940, expanding to more

While the 2023 tax season is still ongoing, the IRS has already seen a massive uptick in scanning paper forms since the start of the filing season. The agency reported that it started with Form 940, and scanning was already at a twenty-fold increase from last year in the first week of March. 

The IRS announced it will be undergoing a Digital Intake initiative, which will expand its efforts at scanning tax forms. The agency will soon include scanning Forms 941 and 1040. 

Currently, the IRS works with Lockbox Financial Agents and other industry partners to make these digital efforts possible. These partnerships allow the IRS to take the information from tax forms and process them electronically – which is ultimately a benefit to taxpayers. 

By digitally scanning tax forms, the process becomes easier and more streamlined for taxpayers. Though the majority of forms are submitted electronically each year, the IRS reported that millions are still submitted with hard copies. 

Electronic submissions ensure that taxes are processed faster, there are likely fewer errors, and the entire process is more efficient. 

'Significant progress'

“We are making significant progress in this effort, and we look to expand scanning efforts dramatically in the months ahead and working toward a fully digital future,” said Harrison Smith, enterprise digitalization and case management office co-director. “We’re building a foundation that will enable us to help taxpayers and businesses for years to come.” 

“Technology powers tax administration and we have completed important work over the last year to help get the assistance they need and reduce paper, in addition to improving the agency’s underlying technology infrastructure,” said Nancy Sieger, chief information officer at the IRS. “This is another positive step in the future technology direction for the IRS that includes improving service to taxpayers.” 

There has been no shortage of warnings related to tax scams in the last few months, and the Internal Revenue Service (IRS) has another one – specifically for businesses. 

This scam relates to the Employee Retention Credit (ERC), which was geared towards business owners during the pandemic. For the last few years, business owners who either lost a significant amount of revenue or were paying their employees while closed during the COVID-19 pandemic were eligible to claim this credit on their taxes. 

However, scammers are sending phishing emails and posting on social media encouraging taxpayers to claim this credit even when they’re not eligible to do so anymore. 

“While this is a legitimate credit that has provided a financial lifeline to millions of businesses, there continues to be promoters who aggressively mislead people and businesses into thinking they can claim these credits,” said Doug O’Donnell, acting IRS commissioner. 

“Anyone who is considering claiming this credit needs to carefully review the guidelines. If the tax professional they’re using raises questions about the accuracy of the Employee Retention Credit claim, people should listen to their advice. The IRS is actively auditing and conducting criminal investigations related to these false claims. People need to think twice before claiming this,” he said. 

Who is eligible for the ERC?

The IRS outlines three primary factors for taxpayers to qualify for the ERC: 

• Qualify as a recovery startup business for the third and fourth quarters of 2021

• Forced closure (either full or partial) due to restrictions from COVID-19 during 2020 or the first three quarters of 2021

• Experienced a significant reduction in revenue in 2020 or the first three quarters of 2021

This is important to keep in mind when thinking about how scammers are targeting business owners this tax season. 

What does the scam look like? 

The IRS explained that scammers are pushing business owners to claim the ERC on their 2022 taxes – even if they don’t qualify. The draw is that doing so will help secure a bigger tax refund. 

While falsely claiming the credit can put taxpayers at risk of penalties, fines, or criminal investigations, many of these scammers are also either asking for incredibly large fees or wait until they see the taxpayer’s refund before they ask for a fee – just for calculating their credit. 

This is the IRS’ third such warning about this scam to taxpayers. While the promise of more money back on taxes sounds great, getting a bigger refund under false pretenses comes with a significant amount of risk. 

For those who may have incorrectly claimed the ERC, the IRS encourages taxpayers to file an amended return with the correct figures. 

The agency is also asking taxpayers to do their part and report any instances of these scams as soon as they encounter them. Phishing activity can be reported to phishing@irs.gov, or to the Treasury Inspector General for Tax Administration at 1-800-366-4484. 

Taxpayers can also complete Form 14242 (Report Suspected Abusive Tax Promotions or Preparers) and mail it to the Internal Revenue Service Lead Distribution Center, Stop MS 5040, 24000 Avila Road, Laguna Niguel, California, 92677. 

Over the course of the tax season, the Internal Revenue Service (IRS) has warned taxpayers of various tax-related scams that are floating around. With just over a month to go until the April 18 filing deadline, the risk of tax fraud and related scams is still ever-present. 

It’s more important than ever for taxpayers to be able to identify the various tax scams, as well as know what to do to protect themselves and their personal information during tax season. 

What do the scams look like? 

Earlier in the tax season, ConsumerAffairs highlighted a few of the biggest scams that pose a threat to taxpayers this time of year. 

One such scam has permeated social media and pushes the idea to taxpayers that falsifying their W2 documents is likely to yield tax returns as high as five figures. Scammers encourage the idea that manually filling out tax returns and filing electronically can help taxpayers secure higher refunds. 

Another tax-related scam involves scammers pretending to be representatives from the IRS to try to get personal information or money from taxpayers on the other end of the phone. In these instances, the agency urges taxpayers to hang up the phone and report the scam. 

“Phishing and scammers are always going to focus on what is top of mind for the public,” Steve Grobman, vice president and chief technology officer at McAfee, told ConsumerAffairs. “Whether it’s the pandemic, the job market, or tax season, we’re seeing bad actors take advantage of these moments for personal gain. 

“Right now, our threats team is seeing an uptick in tax-related scams with tens of thousands of people unknowingly clicking phishing links,” he continued. “This is not new for 2023. Every year, McAfee sees cybercriminals try to lure people with fake tax information that is disguised as reputable tax filing resources and support.” 

How to stay safe during tax season

Grobman, and fellow tax security expert David Putnam, head of Identity Protection Products for LifeLock, had more advice for ConsumerAffairs readers to stay safe in the face of scams this tax season. 

“It sounds simple, but the best way for consumers to protect themselves during tax season is to understand how the IRS works and the types of scams fraudsters use to take advantage of taxpayers,” Putnam said. “For example, IRS impersonation schemes are designed to trick people into believing the IRS has contacted them about their return or refund in order to send phishing links or gather personal information that can be used to steal your identity. It is important to know that the IRS communicates through traditional mail and will never contact you via email, phone, or text.” 

Below are Grobman’s best tips for staying safe during tax season: 

• “Look into purchasing a locking mailbox. Mail and porch theft are still prevalent, and it’s common for thieves to harvest personal and financial information by lifting it from your mailbox.

• Shred paper correspondence that contains personal or financial information, such as bills, medical documents, bank statements and so forth. 

• Lock your smartphones, tablets, and computers with a PIN or password.

• Install comprehensive security solutions on your devices. This will safeguard you in several ways, such as email filters that will protect you from phishing attacks, features that will warn you of sketchy links and downloads, plus further protection for your identity and privacy — in addition to providing overall protection from viruses, malware, and other cyberattacks.”

More tips

Similarly, Putnam shared his best tips for taxpayers to stay safe during tax season: 

• “One of the best ways to avoid IRS scammers looking to steal your refund is by filing your taxes as early as possible. The sooner you submit your tax return, the less likely it will be that someone else can file a fraudulent return in your name. 

• An Identity Protection Personal Identification Number or IP PIN adds a layer of security by assigning a unique PIN to your data. Much like the security code on a credit card, thieves would need this additional number to file a false return in your name. You can get your IP PIN by logging onto the Get an IP PIN tool offered by the IRS. You will have to verify your identity to do this.

• Keep your information private and safe. Following basic cyber safety measures can help protect your personal information from savvy cybercriminals. Install security software on your devices, avoid public Wi-Fi, and use a virtual private network if possible when doing any transactions regarding your finances.

• While the safest way to file is directly through the IRS, it is important to always use a reputable service to file your taxes. Hackers become very good at mimicking major tax prep companies through phishing emails, and ghost preparation services posing as legitimate businesses prey on unknowing taxpayers by stealing returns.”

Tax season is full of deadlines, and now the Internal Revenue Service (IRS) is reminding retired taxpayers of another upcoming one: April 1. 

The agency explained that this is the final day for retirees – particularly those who turned 72 during 2022 – to start receiving payments, or required minimum distributions, from their 401(k), Individual Retirement Agreements (IRAs), or other workplace retirement programs. 

What are required minimum distributions? 

For retirees with certain retirement programs, that money can’t sit in those accounts indefinitely. This is where required minimum distributions (RMDs) come in. 

RMDs are withdrawals that retirees must make from their retirement programs on a yearly basis. While retirees are free to take out more than the minimum requirements, these withdrawals must be included in their taxable income when they file taxes for the year. 

The exact amount of the RMDs will vary from person to person. However, the IRS has several resources available on their website to help taxpayers determine how much they should be withdrawing each year. 

What accounts fall under this rule?

So, which accounts are subject to the RMD rules? Below is the full list: 

• Traditional IRAs

• 401(k) plans

• 457(b) plans

• SEP IRAs

• 403(b) plans

• SIMPLE IRAs

• Roth IRA beneficiaries

• Profit sharing plans

• Other defined contribution plans 

The IRS explained that while these withdrawals typically must happen before the end of the year, for those who turned 72 years old in 2022, the final deadline is April 1, 2023. However, those who take their first withdrawal by April 1 must then make their second withdrawal by December 31, 2023. 

These rules are set to change slightly by the end of this year, though. When it comes time to file 2023 taxes, retirees will be able to wait until they turn 73 to start taking out RMDs. 

More tax resources for seniors

Throughout tax season, the IRS has shared resources that seniors can utilize as they prepare to file their taxes. 

For senior taxpayers who have questions about their retirement plans or pensions, they can reach out to Tax Counseling for the Elderly. This program can help guide taxpayers through the filing process, and clear up any confusion about the filing process. 

IRS’ Free File tool is specifically for those who have made under $73,000 in 2022, and it allows taxpayers to file their federal returns – and some state returns – for free. 

With just over a month until the April 18 tax filing deadline, it’s the perfect time for consumers to make a plan for filing. 

However, what about the plan for those who may not be required by law to file? The Internal Revenue Service (IRS) is suggesting that these Americans may want to consider filing anyway. 

The agency says filing may be beneficial to many people who may not have been planning to do so. To avoid missing out on potential tax credits or a refund, the IRS encourages everyone to file a tax return for 2022. 

How do you know if you should file?

For people who are contemplating whether or not to file this year, the IRS first recommends utilizing the Interactive Tax Assistant. They can input specific information that pertains to their filing situation, and get their questions answered, while also keeping their personal details anonymous. 

Claiming tax credits

The IRS detailed four primary tax credits that consumers may be eligible for – even when they aren’t legally required to file their taxes: Education credits, Child Tax Credit, Earned Income Tax Credit, and Credit for Other Dependents. 

In terms of education credits, you may qualify for either the Lifetime Learning Credits or the American Opportunity Tax Credit. The former can be used to cover tuition and other expenses for any undergraduate, graduate, and professional degree courses, and there is no limit to how many times you can claim this credit; this can equate to a credit that tops out at $2,000. 

The American Opportunity Tax Credit is only available for undergraduate students during their first four years of study. Taxpayers can claim a maximum of $2,500 per year per eligible student. 

You may be eligible for the Child Tax Credit if you have children and make under $200,000 (or $400,000 combined with a spouse on a joint return). The child must be under the age of 17 and can be a child, foster child, sibling, step sibling, half sibling, grandchild, niece, or nephew that is your dependent. 

The Earned Income Tax Credit (EITC) is designed to give a tax break to Americans who earned $59,187 or less in the previous year. This year, the maximum EITC credit is nearly $7,000, and people who have children and are married are likely to get the most back. 

Lastly, the Credit for Other Dependents is for those who have parents or other individuals they support or dependents who are over the age of 18. Filers who don’t qualify for the Child Tax Credit are likely to be eligible for the Credit for Other Dependents. 

Taxpayers can claim the Credit for Other Dependents, in addition to both the Earned Income Tax Credit and the Child and Dependent Care Credit. 

The IRS hopes that consumers consider these various tax credit options before deciding whether or not to file this year. 

The 2023 tax season kicked off on January 23, and many consumers have checked this year’s filing off their to-do lists. Many have even received their refunds already!

However, some taxpayers are left to deal with important tax documents that either never got sent to them, or that have incorrect information. If you’re in this boat, do you know the best way to handle it? 

To help taxpayers make it through the rest of tax season, and ensure that taxes are filed promptly -- at least before the April 18 deadline -- the Internal Revenue Service (IRS) is sharing tips to help remedy this situation for consumers. 

Contact your employer, then the IRS

For taxpayers who are still waiting on their tax documents or received documents with incorrect information, the IRS first suggests reaching out to their employers to try to remedy the situation. If this is unsuccessful, the next step should be contacting the IRS directly. 

Taxpayers should know that when reaching out to the IRS in these instances, they will ask for personal information: Social Security number, address, name, phone number, employer’s name, and dates of employment. From there, the IRS can work to coordinate with the employer to get the correct documents sent as quickly as possible. 

When important tax documents are either missing or incorrect, there are two important things for taxpayers to keep in mind. First, if returns are filed with information that is missing or incorrect, the filing process doesn’t end there. Taxpayers will then have to go on to file an amended return to include any new or updated information once they receive corrected or missing tax documents. 

Secondly, the IRS has two forms – Form 4852 and Form 1099-R – for taxpayers to fill out if they’re still waiting on tax documents or corrected documents. In these instances, either of these forms can help taxpayers get a rough estimate of their income so they can file their taxes on time. 

Resources and tools for tax season 

Whether you’ve already filed your taxes, or have an appointment scheduled in the coming weeks, the IRS has resources for taxpayers to utilize to make the process easier. 

For those who have filed, the “Where’s My Refund” tool can be used to track the progress of the refund. The IRS explained that the service is only updated once a day, and updates are usually available within 24 hours of filing. 

The IRS also has resources available for taxpayers to either find a credible tax professional or have their questions answered with the Interactive Tax Assistant. This tool can help taxpayers who may be struggling with claiming dependents, what kind of income is taxable, eligibility for different tax credits, and more. 

Have you filed your 2022 taxes already? Or, are you part of the more than 30% of taxpayers who wait until the last minute to file? 

A new report from the Chamber of Commerce surveyed taxpayers across the country to get a better idea of their typical filing habits. Experts surveyed 1,000 Americans across the country, and also analyzed data from the U.S. Census and the Internal Revenue Service (IRS). 

The results broke down which states are the most likely to procrastinate filing their taxes, which generations procrastinate filing, how taxpayers are most likely to use their refunds, and more.

Who’s procrastinating the most?

Overall, 31% of taxpayers across the country were likely to procrastinate on filing their taxes. The study highlighted the top 10 cities where residents are the most likely to stall on filing: 

• Atlanta, Georgia

• Orlando, Florida

• Salt Lake City, Utah

• Miami, Florida

• Fort Lauderdale, Florida

• Minneapolis, Minnesota

• Denver, Colorado

• Cincinnati, Ohio

• Seattle, Washington

• Richmond Virginia

Generationally, Baby Boomers were the least likely to procrastinate on their taxes, while Gen Z was the most likely to procrastinate. Over 40% of Gen Z respondents said that they’re likely to wait to file their taxes. 

For nearly 50% of those who procrastinate, the stress and confusion associated with filing taxes is enough to make them wait it out. Additionally, nearly 40% of those surveyed said they wait because they want to be sure their information is correct, while 37% said that the process is too time-consuming. Nearly 30% procrastinate filing because they know they won’t get a refund this year. 

Refunds: saving or spending?

When it comes to tax refunds, just about a quarter of survey respondents believe that their return will be smaller this year than it was last year, while nearly 30% aren’t expecting a return at all. But what do taxpayers plan to do with those refunds? 

Over 35% plan to save any money they get back from the IRS. Just 5% said they’ll use it to plan a vacation, while 8% will use it for a big purchase. A quarter of respondents said that their tax returns will pay off debt, 20% will use it to buy essentials, and 13% will invest it. 

What do the experts say?

So, when is the best time to file taxes? According to experts, the sooner the better. 

“Filing taxes can be a stressful process, so it’s natural for Americans to procrastinate, but there are benefits to filing as early as you can,” Collin Czarnecki, a researcher with LLC.org, told ConsumerAffairs. “For example, if you plan to work with an accountant or CPA this tax season, it’s best to schedule an appointment with them as soon as possible before their calendars fill up. 

“Also, filing as early as possible means that you’ll receive your refund quicker. According to the IRS, the average length of time to receive a refund is about 21 days or three weeks from the date the IRS receives your return. If you wait to file until Tax Day this year, which is April 18, you might not receive your return until May. Whereas if you were to file right now, you could be getting your refund before Tax Day. 

“Depending on the amount of your refund, you can use that extra cash to chip away at debt, such as student loans, car payments, and credit cards,” Czarnecki said. “In fact, 25% of survey respondents say they plan to use their tax refund to pay off debt this year. Filing early can also help you financially prepare if you’re faced with an unexpected amount owed on taxes.” 

As tax season continues to ramp up, the Internal Revenue Service (IRS) is preparing for an influx of calls from taxpayers looking for assistance on their returns. 

The agency explained that President’s Day weekend marks one of the busiest times of the tax season, and to try to get ahead of this, the IRS is encouraging taxpayers to utilize online tax resources – rather than calling the IRS phone lines. 

“The IRS continues to see improvements this tax season compared to previous years, including better phone service,” said Doug O’Donnell, IRS acting commissioner. “But we always see a significant surge in phone traffic around Presidents Day. 

“With the calendar advancing, millions of people turn their attention to taxes during this period. To avoid potential delays, we encourage people to check IRS.gov first, which can provide much of the same information instantly to taxpayers.” 

Some of the online resources available to taxpayers include: 

• The IRS’ frequently asked questions page

• The Tax Withholding Estimator

• The Interactive Tax Assistant

• Where’s My Refund?

• The IRS Services Guide

• IRS Free File 

• The Let Us Help You page 

New online features make the filing process easier

In addition to trying to help taxpayers get assistance with their tax returns as quickly as possible, the IRS also announced that taxpayers will be able to upload more documents to their online accounts. 

Rather than having to send in any of these forms by mail, taxpayers can upload them, and work to get an answer and their problem solved much faster than it would typically take. 

Effective for the 2022 tax season, taxpayers will be able to upload the following documents digitally to their IRS accounts: 

• CP75 and CP75a, relating to the Earned Income Tax Credit

• CP75d, relating to the Earned Income Tax Credit and other credits

• CP09, related to claiming the Earned Income Tax Credit 

• CP06 and C096a, relating to the Premium Tax Credit

• CP04, relating to combat zone status 

• CP05a, information request related to a refund

• CP08, relating to the Child Tax Credit 

When the IRS sends a request for more information, the letter will contain a link and an access code. Once taxpayers open the link, they’ll have to provide the access code and personal information – like their Social Security number or tax identification number – to ensure their identity is legitimate. From there, they’ll be able to upload the necessary documentation. 

“This provides immediate benefit to taxpayers, who have nearly instant confirmation that documents were received by the IRS,” O’Donnell said. “This means people can have their issues resolved much faster, including getting refunds to affected taxpayers faster.” 

As tax season kicks off and consumers prepare for filing, it’s normal for questions and concerns to pop up. 

For taxpayers in 21 states, specific tax state payments related to the COVID-19 pandemic or other disaster relief efforts may have been causing confusion. Now, the Internal Revenue Service (IRS) is clearing up any questions taxpayers may have about this situation. 

“The IRS is aware of questions involving special tax refunds or payments made by certain states related to the pandemic and its associated consequences in 2022,” the IRS wrote in its guidance.

“A variety of state programs distributed these payments in 2022 and the rules surrounding their treatment for federal income tax purposes are complex. While in general payments made by states are includable in income for federal tax purposes, there are exceptions that would apply to many of the payments made by states in 2022.” 

What states are included? 

Ultimately, the IRS determined that any payments made related to disaster relief or general welfare will not be challenged, and taxpayers aren’t required to report them on their 2022 taxes.

The following states will not have to report these special state payments on their taxes: Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. 

However, there are a number of other states with some exceptions. Taxpayers located in Virginia, Georgia, South Carolina, and Massachusetts will also be excluded from claiming these payments as income if the payment was a refund of state taxes that were paid. 

The IRS explained that as of May 2023, the COVID-19 pandemic will no longer be considered an emergency. This means that any state-specific payments related to the pandemic will only affect taxpayers when filing their 2022 taxes. 

While filers would typically be required to include such payments in their taxable income, withholding these payments for 2022 taxes will be permissible. 

A full list of acceptable payments for taxpayers to be aware of can be found here.

Every taxpayer has a unique filing situation. Whether you work in the gig economy or need assistance with retirement plans, tax season can often be a confusing time for many taxpayers. 

While the Internal Revenue Service (IRS) has worked to release resources and tips throughout tax season, the latest bit of advice is geared towards business travel. 

Taxpayers who travel for their jobs are entitled to write off their trips on their taxes, but it’s important to know what is and isn’t eligible for tax deductions this year. 

What can taxpayers write off? 

The IRS has outlined a number of requirements for which parts of business trips are able to be deducted on taxes. These include: 

• Using a personal car for business

• Business calls and communication

• Travel by plane, train, bus, or car between your home and business destination 

• Dry cleaning and laundry

• Tips for services related to any expenses

• Fares for taxi or transportation to or from an airport, train station, hotel, or work location

• Lodging and meals 

• Convention-related expenses (if attendance benefits the business) 

• Shipping of baggage or display materials between regular or temporary work locations 

• Any other related necessary and ordinary expenses related to business travel 

Perhaps the biggest thing for taxpayers to keep in mind is that any personal or extravagant purchases aren’t eligible for tax deductions. Anything claimed on taxes must be necessary to the business trip. 

Taxpayers must also keep in mind that expenses are eligible to be written off for trips that are under one year in length. Additionally, military personnel, self-employed workers, and farmers are all eligible to deduct expenses from business trips. 

Digital assets must be reported on taxes

When filing 2022 taxes, taxpayers will again be responsible for reporting all digital assets, or virtual currencies. This includes: non-fungible tokens (NFTs), cryptocurrency and convertible virtual currency, and stablecoins. 

While this will appear as a yes or no question on the 2022 return, it’s important to note that taxpayers who haven’t completed any transactions related to their digital assets can answer “no.” Simply owning any kind of virtual currency doesn’t count as digital income. 

However, taxpayers who have sold, exchanged, or gifted a digital asset, or those who received a digital asset (either as payment for a service or property, or as a reward or an award), must claim it on their 2022 taxes. 

More information is available here.

While tax season requires taxpayers to get all of their documents in order and ready for filing, it’s also important to be aware of tax withholdings for the 2023 tax year. 

The Internal Revenue Service (IRS) explained that any number of factors can affect how much taxpayers owe in a given year – changing filing status, changing living situation, having a child, changing jobs, etc. However, to avoid penalties and having to make additional tax payments, it’s important for taxpayers to know just how much they’re withholding this year. 

Estimated payments can help taxpayers avoid penalties

Taxpayers have two primary options when it comes to paying taxes: withholding taxes from paychecks, pensions, or government payments like Social Security, or by making estimated tax payments. 

For taxpayers who have experienced a major life change within the last year – changing their filing status (single to married or vice versa), having a child, moving, changing jobs – or for those who are self-employed or work in the gig economy, taxes are likely to look different. The IRS encourages taxpayers to look at their current withholdings and think about how to best approach their taxes for the new year. 

For those who don’t choose to either withhold more taxes or make estimated tax payments, the result is likely going to be a rather large tax bill when it comes time to file. To avoid this, the IRS encourages taxpayers to consider estimated tax payments or increasing withholdings. 

The Tax Withholding Estimator can help taxpayers get a better idea of whether or not they need to up their withholdings or think about incorporating estimated tax payments. 

Utilizing the adoption tax credit

When it comes time to file 2022 taxes this year, taxpayers who have adopted children should be mindful of the adoption tax credit. The maximum credit for 2022 is $14,980 per child, and it is valid for U.S. taxpayers regardless of whether or not the adoption was domestic or foreign. 

Expenses that can be deducted under the credit include: 

• Court costs and attorney fees

• Traveling expenses (including meals and lodging away from home)

• Reasonable and necessary adoption fees

• Other expenses related to the principal purpose of the legal adoption of an eligible child 

More information on income limits, timing rules, and claiming the credit is available here. 

It’s official: tax season will start in just under two weeks. 

The Internal Revenue Service (IRS) announced that taxpayers can begin filing their 2022 taxes beginning on January 23. 

In an effort to handle the over 168 million tax returns that are expected to be filed this year, the IRS has hired more support staff and put resources in place to help make the process easier for taxpayers. 

“This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,” said Doug O’Donnell, acting IRS commissioner. “With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year. 

“We’ve trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax year. That’s just the start as we work to add new long-term transformation efforts that will make things even smoother in future years. We are very excited to begin to deliver what taxpayers want and our employees know we could do this with funding.” 

What resources are available for taxpayers? 

With just about four months to have all of the proper tax paperwork filed, it’s important for taxpayers to know what resources are available to them and what tips the IRS has for a smooth filing. 

Should any questions come up during the process, the IRS urges taxpayers to first head to its website – IRS.gov. While the agency is taking steps to improve its phone-answering service, experts anticipate that the number of calls will remain higher than normal. To get answers as fast as possible, the website can be accessed at any time without having to wait on hold. 

According to the IRS, the fastest way for taxpayers to receive their refunds is to file electronically with direct deposit. A prepaid debit card, mobile app, or bank account can all be linked to your 2022 return, which will help speed up the refund process. 

The IRS explained that most taxpayers will see their refund hit their account within three weeks – as long as they use direct deposit. To track your refund, the Where’s My Refund feature is available. 

The best way to avoid a delayed refund is to have all of your tax documents (W2s, 1099s, Social Security number, etc.) prepared and ready to go when it comes time to file. Reducing the likelihood that there are any errors on your return will help move the refund process along and avoid any late fees or penalties from the IRS. 

For more tips, resources, and information on preparing for tax season, the IRS has more resources available here.

Photo (c) Phillip Rubino - Getty Images

As taxpayers are preparing to file for the 2022 tax season, the Internal Revenue Service (IRS) is working to amend errors from back in 2020. 

Following the passage of the American Rescue Plan Act in 2021, taxpayers whose annual income was under $150,000 were eligible to exclude $10,200 in unemployment earnings from their 2020 taxes. For married couples filing jointly, each spouse was eligible to exclude that figure. 

For taxpayers who may have overpaid when it comes to unemployment compensation for 2020, the IRS will issue corrections – and even refunds. After reviewing Forms 1040 and 1040-SR, which identified taxpayers who were eligible for this tax credit, the IRS was able to calculate any errors from 2020.  

What taxpayers can expect

So, what should taxpayers expect from this amendment to 2020 taxes? 

Each individual is likely to have a different experience. However, if your account was corrected, you will receive correspondence from the IRS detailing the changes. The correction could mean an additional check from the IRS, or it could translate to a correction on adjusted income on your 2020 tax return. 

Taxpayers should pay close attention to the following tax credits, as the adjusted returns could show up in: the Earned Income Tax Credit, the Recovery Rebate Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, the Premium Tax Credit, or the Advance Premium Tax Credit. 

What to do if you haven’t received corrections from the IRS

While the IRS reported that 14 million returns were adjusted, and 12 million taxpayers received refunds, the agency has advice for taxpayers if their account hasn’t been updated but they were eligible for the unemployment compensation exclusion. 

The IRS recommends filing an amended tax return for 2020, detailing eligibility for the exclusion, as well as any potentially refundable credits. 

For taxpayers who may not know if they are eligible for a correction to their 2020 taxes, or who may have questions about corrections to their 2020 taxes, more information is available here. 

With the turn of the calendar, many Americans have their sights set on another annual milestone: tax season. 

While this time of year may leave many taxpayers confused, unsure, or with questions, the Internal Revenue Service (IRS) has a resource that can be helpful during this season – the Taxpayer Bill of Rights.

The document was designed to outline taxpayers’ rights – both during tax season and beyond, as well as what it looks like to get refunds, examinations, collections, and appeals. 

What rights do taxpayers have?

The official document from the IRS outlines 10 important rights that taxpayers have when filing their taxes – and throughout the entire year: 

• The Right to Be Informed: This requires clear communication from the IRS to taxpayers in regard to decisions about tax accounts, information on complying with tax laws, as well as clear explanations of all tax laws and IRS procedures on all documentation. 

• The Right to Quality Service: When communicating directly with the IRS, taxpayers are entitled to receive clear, concise communication in a prompt, easy-to-understand manner. Taxpayers are encouraged to reach out to supervisors or higher-ups if this is not the case. 

• The Right to Pay No More Than the Correct Amount of Tax: This includes any accrued interest or penalties. 

• The Right to Challenge the IRS’ Position and Be Heard: Should taxpayers have any objections regarding any actions taken by the IRS, they have the right to object to the agency. Additionally, the IRS is required to respond to such objections. 

• The Right to Appeal an IRS Decision in an Independent Forum: Should taxpayers have any issues with decisions made by the IRS, they have the right to appeal such decisions – and go to court if necessary. Any appeals must be met with a written response from the IRS’ Office of Appeals. 

• The Right to Finality: When waiting on any communication from the IRS regarding an audit, an appeal, or debt collection, taxpayers have the right to know exactly how long these processes should take. 

• The Right to Privacy: Should the IRS require any additional action – including enforcement action, general inquiries, or examinations, it must adhere to all laws and should not involve any extra force or intrusion. 

• The Right to Confidentiality: All information provided by taxpayers to the IRS must remain confidential to the agency – unless permission is explicitly granted to the agency. Tax preparers and IRS employees who mishandle taxpayers’ personal information are subject to legal action. 

• The Right to Retain Representation: In the event of any legal proceedings with the IRS, taxpayers can retain the representation of their choosing – certified public accountant, an enrolled agent, or an attorney. For taxpayers who may not be able to afford representation, the Low Taxpayer Clinic can help provide assistance. 

• The Right to a Fair and Just Tax System: Under this tenet, the IRS is required to consider outside factors in taxpayers’ lives that can affect how quickly they’re able to provide information or make payments. This also applies to compromises when paying back tax debt. Additionally, lower-income individuals can utilize programs such as the Low Income Taxpayer Clinic and the Taxpayer Advocate Service. 

More information on all of these rights is available to consumers here.

While many Americans are preparing to file their 2022 taxes, the Internal Revenue Service (IRS) is announcing new updates for 2023 taxes. 

The agency has released the standard mileage rates that will be eligible for tax deductions for cars, vans, panel trucks, or pickup trucks for charities, moving, business, or medical purposes. These updates will hold up for: diesel-powered cars, gas-powered cars, hybrid vehicles, and electric vehicles. 

What’s new for 2023?

As of January 1, 2023, the following updates will go into effect for the standard mileage rates for the 2023 tax season: 

• 14 cents per mile driven for charities (unchanged from 2022) 

• 65.5 cents per mile driven for businesses (up 3 cents from the second half of 2022)

• 22 cents per mile for medical or moving purposes for active-duty Armed Forces members 

What should taxpayers know?

When deducting the expenses for using a personal vehicle for business, medical, or charitable purposes, taxpayers have the option of either calculating their exact expenses or using the IRS’ standard mileage rate. 

In this announcement, the IRS explained that any leased vehicles must have costs deducted using the standard mileage rate. Additionally, the first year that a vehicle is used for business purposes, taxpayers must utilize the standard mileage rate. After that, taxpayers are free to choose between the standard mileage rate and calculating the exact expenses. 

It’s also important to note that claiming expenses related to moving is now only valid for active members of the Armed Forces who are being stationed at different locations. 

Each year, the IRS utilizes fixed and variable data related to owning and operating a vehicle to set the yearly standard mileage rate. 

To read the full 2023 standard mileage rates report, click here.