What You Need to Know About Tax Season 2023

Last updated Jun. 25, 2024 by Peter Jakes

As the calendar turns and tax season 2023 approaches, millions of taxpayers in the United States begin to prepare for filing their annual returns. It’s a period marked by a flurry of paperwork, a spike in tax-related inquiries, and, for some, anxiety about meeting IRS deadlines. Whether you’re a seasoned taxpayer or a first-time filer, being well-informed about the latest tax rules, deadlines, and tips can save you both time and money.

In this article, we’ll cover everything you need to know about Tax Season 2023, including key changes, important deadlines, the types of tax forms you might need, and some common FAQs. Hopefully, this will serve as a comprehensive guide to help you navigate the complexities of the tax filing process.

Important Tax Deadlines for 2023

One of the most critical aspects of tax season is understanding and adhering to deadlines. Missing important dates can lead to penalties and interest, which can complicate your financial situation. Here are some key deadlines for Tax Season 2023:

• January 17, 2023: Deadline to pay the fourth quarter estimated tax payment for the year 2022.
• January 31, 2023: Employers must send W-2 forms to employees and some 1099 forms to contractors by this date.
• April 18, 2023: The due date for filing your 2022 income tax return if you request an extension using Form 4868.
• June 15, 2023: Deadline for U.S. citizens and residents living abroad to file their 2022 income tax return and to pay any taxes due.
• October 16, 2023: Final extended deadline to file your 2022 tax return.

Key Changes for the 2023 Tax Season

Every year, there are adjustments and updates to the tax code that can affect your filing. Here are some significant changes for tax year 2022 that will impact Tax Season 2023:

• Standard Deduction Increase: Inflation adjustments have increased the standard deduction. For single filers, the standard deduction is $12,950, and for married couples filing jointly, it’s $25,900.
• Child Tax Credit: The Child Tax Credit has reverted back to its pre-2021 level. The maximum credit is $2,000 per qualifying child, down from $3,600 in 2021.
• Earned Income Tax Credit (EITC): The maximum EITC available has increased for 2022, providing up to $6,935 for taxpayers with three or more qualifying children.

Must-Have Tax Forms

You’ll encounter various forms during tax season, each serving a specific purpose. Here are some of the most common ones:

• Form W-2: Sent by employers, this form reports annual wages and the amount of taxes withheld from your paycheck.
• Form 1099: There are several types of 1099 forms, including 1099-MISC for miscellaneous income and 1099-NEC for non-employee compensation.
• Form 1040: The main income tax return form used by individuals.
• Form 4868: An application for an automatic extension of time to file your income tax return.

How to File Your Taxes

Filing your taxes can seem daunting, but it can be broken down into a series of manageable steps. Here’s a simplified outline of the process:

1. Gather Your Documents: Collect all necessary financial records, including W-2s, 1099s, and receipts for deductible expenses.
2. Choose Your Filing Method: Decide whether you want to file electronically using tax software or manually by completing paper forms.
3. Fill Out the Forms: Enter the required information into the appropriate tax forms. Double-check for accuracy.
4. Submit: Send your completed forms to the IRS by the deadline. If you’re filing electronically, use the IRS’s online system or a tax software provider.

Tax Software and Professional Help

One of the best ways to simplify the tax filing process is to use tax software or hire a tax professional. Here’s a quick overview of these options:

Tax Software

There are various tax software programs designed to make the filing process easier. Popular options include TurboTax, H&R Block, and TaxAct. These programs guide you through each step of the filing process and ensure that all your information is accurate and complete.

Professional Help

Hiring a certified public accountant (CPA) or a tax advisor can provide peace of mind, especially if you have a complex financial situation. Professionals can help identify deductions you might have missed, ensure accuracy, and offer advice for future tax planning.

Common Tax Deductions and Credits

Understanding which deductions and credits you qualify for can significantly reduce your tax bill. Here are some common ones to consider:

Deductions

• Mortgage Interest: You can deduct the interest paid on your mortgage.
• Charitable Contributions: Donations to qualified charitable organizations may be deductible.
• Medical Expenses: Qualified unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI) can be deducted.

Credits

• Child and Dependent Care Credit: This credit can help offset the costs of care for children under 13 or disabled dependents while you work or look for work.
• Education Credits: The American Opportunity Credit and the Lifetime Learning Credit can help offset the costs of higher education.
• Energy-Efficient Home Improvement Credit: This credit is available for homeowners who make energy-efficient upgrades to their property.

IRS Resources and Tools

The IRS offers various resources to help you during tax season:

• IRS Website: The official IRS website is a comprehensive resource for tax forms, instruction booklets, and updates.
• Free File: The IRS Free File program offers free tax preparation and e-filing for taxpayers with an AGI of $73,000 or less.
• Interactive Tax Assistant: This tool on the IRS website helps you find answers to your tax questions.

What If You Missed the Deadline?

If you missed the tax filing deadline, don’t panic. Here’s what to do:

1. File as Soon as Possible: Even if you missed the deadline, file your return as soon as you can to minimize penalties and interest.
2. Request a Payment Plan: If you owe taxes and cannot pay them all at once, you can request a payment plan through the IRS.
3. Penalty Relief: In some cases, you may qualify for penalty relief if you have a valid reason for missing the deadline.

FAQs

What are the key deadlines for Tax Season 2023?

Important dates to remember include April 18, 2023, for federal tax returns, and October 16, 2023, for those who filed an extension.

What changes should I be aware of for Tax Season 2023?

Significant changes include the increase in the standard deduction and the reversion of the Child Tax Credit to pre-2021 levels.

Can I still get my refund if I file late?

Yes, even if you file late, you can still receive your refund. However, filing late without an extension may subject you to penalties.

What tax software is recommended?

Popular tax software options include TurboTax, H&R Block, and TaxAct. These programs offer step-by-step guides and accuracy checks.

Where can I find IRS resources?

The IRS website (www.irs.gov) offers a wealth of resources, including forms, instructional guides, and interactive tools.

What are the advantages of hiring a tax professional?

Hiring a professional can help ensure your return is accurate, maximize deductions, and provide personalized tax advice.

Understanding these essentials for Tax Season 2023 can help make the filing process smoother and less stressful. With the right preparation, you can avoid unnecessary headaches and penalties, ensuring a successful tax season.