WASHINGTON — To help taxpayers navigate the beginning of the tax filing season, the Internal Revenue Service today offered a checklist of reminders for people as they prepare to file their 2022 tax returns.

From gathering paperwork to filing a tax return, these easy steps will make tax preparation smoother in 2023:

1. Gather tax paperwork and records for accuracy to avoid missing a deduction or credit.

Taxpayers should have all their important and necessary documents before preparing their return. This helps people file a complete and accurate tax return. Errors and omissions slow down tax processing, including refund times.

Some information taxpayers need before they begin includes:

• Social Security numbers for everyone listed on the tax return,
• Bank account and routing numbers,
• Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions,
• Form 1095-A, Health Insurance Marketplace statement,
• Any IRS letters citing an amount received for a certain tax deduction or credit.

​​​​​​​2. Remember to report all types of income on the tax return.

This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:

• Goods created and sold on online platforms,
• Investment income,
• Part-time or seasonal work,
• Self-employment or other business activities,
• Services provided through mobile apps.

3. File electronically with direct deposit to avoid delays in receiving a refund.

Avoid paper returns. Tax software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question-and-answer format.

For those waiting on their 2021 tax return to be processed, here’s a special tip to ensure their 2022 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year’s adjusted gross income (AGI) on the 2022 tax return. Everyone else should enter their prior year’s AGI from last year’s return.

4. Free resources are available to help eligible taxpayers file online. Free help may also be available to qualified taxpayers.

IRS Free File provides a free online alternative to filing a paper tax return. IRS Free File is available to any individual or family who earned $73,000 or less in 2022.

With IRS Free File, leading tax software providers make their online products available for free as part of a 21-year partnership with the IRS. This year, there are seven products in English and one in Spanish. Taxpayers must access these products through the IRS website.

People who make over $73,000 can use the IRS’ Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.

Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

5. Choose a tax professional carefully.

Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.

6. Avoid phone delays; use online resources before calling the IRS.

To avoid waiting on hold, the IRS urges people to use IRS.gov to get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day. The IRS’ Interactive Tax Assistant tool and Let Us Help You resources are especially helpful.

Additionally, the IRS suggests taxpayers stay up to date on important tax information online by:

• Following the IRS’ official social media accounts and email subscription lists to stay current on the latest tax topics and alerts.
• Downloading the IRS2Go mobile app, watching IRS YouTube videos, or following the IRS on Twitter, Facebook, LinkedIn and Instagram for the latest updates on tax changes, scam alerts, initiatives, products and services.

Source: IRS-2023-17, January 31, 2023

WASHINGTON — The Internal Revenue Service reminds taxpayers who earn wages to use the Tax Withholding Estimator now to adjust their 2023 withholding. People’s tax situations occasionally change through marriage or divorce, adding a child or having one move out on their own. Checking now and making necessary adjustments early in the year may help them avoid the need for quarterly estimated tax payments.

The Tax Withholding Estimator online tool helps taxpayers see if they may get a refund or need to make a payment directly to the IRS to avoid a tax bill and penalties next year.

Income taxes are pay-as-you-go and are normally paid during the year as income is received through withholding from paychecks, pension payments, Social Security benefits or certain other government payments.

Having a second job or non-wage income from unemployment, self-employment, annuity income, the gig economy or digital assets may require taxpayers make quarterly estimated tax payments to avoid a balance due when they file.

In addition, various financial transactions, especially late in the year, can have an unexpected tax impact. Examples include year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, real estate or other property sold at a profit.

Tax Withholding Estimator

The Tax Withholding Estimator, also available in Spanish, can help wage earners determine if they have too much or too little tax withheld. Taxpayers may use the estimate to change their withholding amount and submit a new Form W-4, Employee’s Withholding Certificate, to their employer. The tool offers those who earn wages step-by-step help for tailoring the amount of income tax they should have withheld from their paycheck.

Make a tax payment

The fastest and easiest way to make an estimated tax payment is to do so electronically using IRS Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). For information on other payment options, visit Pay Online. If paying by check, be sure to make the check payable to the “United States Treasury.”

Other items may affect 2023 taxes

Some unforeseen life events can trigger a need to make withholding adjustments. Here are some tools to help taxpayers know how to make adjustments due to different scenarios:

• Tips for using the IRS Tax Withholding Estimator.
• What to do with your Tax Withholding Estimator results.
• About Form W-4, Employee’s Withholding Certificate – including recent updates, related forms and instructions on how to file.
• Coronavirus tax relief – help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by the coronavirus (COVID-19).
• Disaster Assistance and Emergency Relief for Individuals and Businesses – special tax law provisions when the federal government declares their location a major disaster area.
• IRS Publication 4128, Tax Impact of Job LossPDF – explains how this unfortunate circumstance can create new tax issues.
• Workers moving into the gig economy due to the pandemic – advises people earning income in the gig economy.
• Publication 505, Tax Withholding and Estimated Tax, has additional details, including worksheets and examples, that can be helpful to those who have special situations.

More Information:

• Fact Sheet 2023-01, How to get tax withholding right

Source: IRS-2023-10, January 19, 2023

Most states require that you file an annual report to keep company information current with the Secretary of State. Each state has different rules and regulations regarding the frequency and filing location for your annual reports. That’s why we compiled a chart containing the annual report due dates in all 50 states.

Find your state below to see the annual report filing due dates specfific to your entity type.

WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) that would have generated Form 1099-Ks for taxpayers.

“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”

The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.

Under the law, beginning January 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee’s an IRS Form 1099-K, Payment Card and Third-Party Network Transactions.

The transition period described in Notice 2023-10PDF, delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction.

The change under the law is hugely important because tax compliance is higher when amounts are subject to information reporting, like the Form 1099-K. However, the IRS noted it must be managed carefully to help ensure that 1099-Ks are only issued to taxpayers who should receive them. In addition, it’s important that taxpayers understand what to do as a result of this reporting, and tax preparers and software providers have the information they need to assist taxpayers.

Additional details on the delay will be available in the near future along with additional information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions and clarity so that taxpayers understand what to do.

The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

Source: IRS

WASHINGTON — The Internal Revenue Service today announced Monday, January 23, 2023, as the beginning of the nation’s 2023 tax season when the agency will begin accepting and processing 2022 tax year returns.

More than 168 million individual tax returns are expected to be filed, with the vast majority of those coming before the April 18 tax deadline. People have three extra days to file this year due to the calendar.

With the three previous tax seasons dramatically impacted by the pandemic, the IRS has taken additional steps for 2023 to improve service for taxpayers. As part of the August passage of the Inflation Reduction Act, the IRS has hired more than 5,000 new telephone assistors and added more in-person staff to help support 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 Acting IRS Commissioner Doug O’Donnell. “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 season. 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 with this funding.”

These steps took place as the IRS worked for months to prepare for the 2023 tax season. The January 23 start date for individual tax return filers allows the IRS time to perform annual updates and readiness work that are critical to ensuring IRS systems run smoothly. This is the date IRS systems officially begin accepting tax returns. Many software providers and tax professionals are already accepting tax returns; they will transmit those returns to the IRS when the agency begins accepting tax returns on January 23.

The IRS urges people to have all the information they need before they file a tax return. Filing a complete and accurate tax return can avoid extensive processing and refund delays as well as avoid the possibility of needing to file an amended tax return.

In addition, the IRS encourages people to carefully review their tax situation to make sure they don’t overlook important tax credits they may be eligible for, like the Earned Income Tax Credit (EITC). The IRS has set a special day on January 27 to encourage people to make sure they understand the important benefits of the EITC, a credit that can help low- and moderate-income workers and families.

The IRS has a variety of free services available to help people. The IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs also offer free basic tax return preparation to qualified individuals. People can also get help from trusted tax professionals, commercially available tax software as well as IRS Free File, which provides free electronic filing of tax returns.

April 18 tax filing deadline in 2023

The filing deadline to submit 2022 tax returns or an extension to file and pay tax owed is Tuesday, April 18, 2023, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays. The due date is April 18, instead of April 15, because of the weekend and the District of Columbia’s Emancipation Day holiday, which falls on Monday, April 17.

Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.

Tips to help people with the 2023 tax season

The IRS recommends several things for people to keep in mind for a smooth filing experience this year:

Have the right information before filing. The IRS encourages individuals to have all the information they need before filing a complete and accurate return. Organize and gather 2022 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers and this year’s Identity Protection Personal Identification Numbers valid for calendar year 2023.

Filing an accurate tax return can help taxpayers avoid delays or later IRS notices. Sometimes this means waiting to make sure individuals have accounted for all their income and the related documents. This is especially important for people who may receive one of the various Forms 1099 from banks or other payers reporting unemployment compensation, dividends, pension, annuity or retirement plan distributions.

People should also remember that most income is taxable, including unemployment income, interest received or money earned from the gig economy or digital assets. Individuals should make sure they report the correct amount on their tax return to avoid processing delays.

Visit IRS.gov first for questions. The IRS reminds people to visit IRS.gov first for common questions and also to check on the status of their refunds. IRS.gov has much of the same information that IRS phone assistors have.

The IRS anticipates making significant improvements to phone service this year for taxpayers and tax professionals as more training for new phone assistors is completed in the weeks ahead. However, the IRS emphasizes it’s important to note that call volumes remain at historically high levels. The IRS urges people to visit IRS.gov for the information they need.

“Our phone volumes remain at very high levels,” O’Donnell said. “For faster access to information, we urge people to start with IRS.gov. From there, taxpayers can quickly access the variety of free resources available to help taxpayers anytime, day or night.”

Speed refunds by filing electronically and choosing direct deposit. There are important steps people can take to help ensure their tax return and refund are processed without delays. The most important is to file electronically with direct deposit. This is still the fastest and easiest way to file and receive a refund. To avoid delays in processing, people should avoid filing paper returns wherever possible.

To speed refunds, the IRS urges people to file electronically with direct deposit information as soon as they have everything needed to file an accurate return. Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers with their return. Learn how to open an account at an FDIC-insured bank or through the National Credit Union Locator Tool.

IRS Free File available January 13

IRS Free File will open January 13 when participating providers will accept completed returns and hold them until they can be filed electronically with the IRS. Many commercial tax preparation software companies and tax professionals will also be accepting and preparing tax returns before January 23 to submit the returns when the IRS systems open.

The IRS’s Free File program, available only at IRS.gov, allows taxpayers who made $73,000 or less in 2022 to file their taxes electronically for free using brand-name software provided by commercial tax filing companies. Free File Fillable forms, a part of this effort, is available to any income level and provides free electronic forms that people fill out and file themselves also at no cost.

Most refunds issued in less than 21 days; EITC refunds for many available starting February 28

The IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically, if they choose direct deposit and there are no issues with their tax return. Taxpayers should check Where’s My Refund? on IRS.gov for their personalized refund status.

While the IRS will begin accepting returns January 23, the IRS cannot issue a refund that includes the Earned Income Tax Credit or Additional Child Tax Credit (ACTC) before mid-February. This is due to the 2015 PATH Act law passed by Congress, which provides this additional time to help the IRS stop fraudulent refunds from being issued.

Where’s My Refund? should show an updated status by February 18 for most early EITC/ACTC filers. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by February 28 if taxpayers chose direct deposit and there are no other issues with their tax return.

Awaiting processing of previous tax returns? People can still file 2022 returns

Currently, the IRS has processed all paper and electronic individual tax year 2021 returns received prior to November 2022 that didn’t require error-correction or further review. The IRS continues to work on remaining tax returns in these categories. This work will not impact tax refund timing for people filing in 2023, but the IRS continues to urge people to make sure they submit an error-free tax return this tax season to avoid delays. Check the IRS Operations page for the latest information about the status of tax returns received in 2022.

Source: IRS-2023-05, January 12, 2023