Tax filing

5 Steps To Take Now To Make Tax Filing Easier Next Year

Savvy taxpayers consider their income taxes an ongoing process rather than a one-time occurrence. Even though Tax Day 2022 may be gone, some employees are still preparing for the 2023 tax season.

Store Your Tax Return Securely

Getting organized is one of the most frequently mentioned suggestions for simplifying tax preparation. Your tax return is where it all starts. Put your tax return and related paperwork in a secure location, such as a desk drawer, where you can keep them organized all year.

Sort any papers you receive into at least four separate categories: income items, deductions, life changes, and others, including those that can impact your taxes. Put papers into each file in the appropriate order.

Maintain Expense Records For Tax Deductions

It’s a good idea to start keeping track of the company costs you intend to write off as away as you organize any paperwork with tax implications.

This might result in a more significant return and time savings for you. Use a system of organization that works best for you to make it simple to locate these costs when it comes time to deduct them from your income on your tax return.

Aware of Changes in Tax Law

The tax year of 2022 was significantly different from the previous few. When it comes time to pay income taxes, there may be refund shock or whiplash compared with last year.

No monthly payments or a more significant credit amount in 2022, no above-the-line charitable donation deductions, and unemployment income will be completely taxable. This is because the child tax credit has been restored to its usual level and distribution.

Users of third-party applications are affected by another significant tax code change. The corporations will also provide this information to the IRS.

Make Sure That Tax Withholdings Are Correct

We advise making sure you are deducting the appropriate amount from your paychecks.

This can significantly impact your tax return because if you withhold less, you risk paying the IRS to come tax day or receiving a lesser refund than you anticipate.

Update your Form W-4 if you received a sizable refund or tax payment in 2022. If you need help with how to proceed, contact your employer for guidance or advice from a CPA or accountant.

Changing your tax withholding amount is something you can do at any time, not only when major life events like beginning a new job, getting married or getting divorced happen.

Make Early Filing Plans for 2023

You could start making plans to file as early as feasible in 2023 if you filed too late to the Tax Day deadline in 2022. Wait to file until the last minute, especially if you have all the necessary information and documents.

It’s a good idea to file early. Not only will you receive your return faster, giving you more time to collect any money you may owe the state or the IRS, but it also locks up your data and information, making it more difficult for tax fraud.

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