We’ve officially entered tax season, so we thought we’d take the time to remind you about some of the steps you might want to take to prepare. The IRS has taken several steps to help people get the information they need to file their 2023 tax returns. Visit the IRS’ official website to get access to information such as steps you can take to make filing easier. We care about you and your long-term financial success, and it’s for this reason that we decided to give you a rundown of some of that info. Here are a few of the tips the IRS had to share with taxpayers
Update Your Records
Gather, organize, and update all of your tax records. Organizing your tax records makes it easier to prepare a complete and accurate return. This helps you avoid errors that could slow down refunds, and may also help you find overlooked deductions or tax credits. The majority of your income is taxable, including unemployment compensation, refund interest, and income from digital assets. It’s recommended that taxpayers gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, and other such documents before they file their tax return. And, don’t forget to notify the IRS of your new address if you have moved.
Make Sure Paychecks Have Enough Tax Withheld
The Tax Withholding Estimator tool on the IRS website can help you determine the right amount of tax to have withheld from your paychecks. Taxpayers can benefit from this if an earlier tax return resulted in tax owed or a large refund. For those who’ve undergone major life changes, such as getting married, getting divorced, or for those taking on a second job, for example, this tool can help you calculate estimated tax payments. Update your withholding with your employer, either online or by submitting a new Form W-4 to change federal tax withholding.
However, be aware that you have to act quickly to make adjustments in time to affect 2023 tax withholding. Only a few pay periods remain during this year, and payroll systems need time to make withholding changes.
Make Use of the Online Tools the IRS Offers
When preparing to file your taxes, you should definitely make a stop off at the IRS’s official website. There, you can get the information and tools you need to adequately prepare for tax filing time. These tools are easy to use and accessible 24/7. Millions of people use them to help file and pay their taxes, track their refunds, find important info about their accounts, or get answers to essential tax questions.
Volunteer to Help Taxpayers File Their Returns
The IRS is always looking for more people to become volunteers–they accept people across the country to join their Volunteer Income Tax Assistance (VITA) program or Tax Counseling for the Elderly (TCE) program. If you choose to volunteer, you can help eligible taxpayers with free tax preparation. Visit IRS.gov/volunteers to learn more, and you can register if you want to. After signing up, you will receive further instructions on how to attend a virtual orientation.
Stay Up-to-Date on Changes
A vital part of getting prepared for tax season is knowing which tax bracket you will most likely be in. There are still seven tax rates, however, tax brackets for each rate have shifted in an inflation adjustment. The following changes apply:
| Tax rate | Single filers | Married couples filing jointly or qualifying widows or widowers |
|---|---|---|
| 10% | $0 – $11,000 | $0 – $22,000 |
| 12% | $11,001 – $41,725 | $20,001 – $89,450 |
| 22% | $44,726 – $95,375 | $89,451 – $190,750 |
| 24% | $95,376 – $182,100 | $190,751 – $364,200 |
| 32% | $182,101 – $231,250 | $364,201 – $462,500 |
| 35% | $231,251 – $578,125 | $462,501 – $693,750 |
| 37% | $578,126 and up | $693,751 and up |
For single filers, the 2023 standard deduction increased to $13,850. Meanwhile, for single heads of households who are unmarried with one or more dependents, it went up to$20,800. Lastly, for married couples filing jointly, it’s now $27,700. Itemized deductions remain mostly the same. For most filers, simply taking the higher standard deduction is more practical, rather than going to the trouble of holding onto and keeping track of your receipts. But, if you have enough tax-deductible expenses, itemizing might be worth it.
Reach Out to a Professional
Reaching out to a qualified tax professional can help you navigate our current tax system. However, it’s very important that you work with the right person. You need a qualified tax professional with the right skills in tax preparation, who can accurately file your returns. Every year, taxpayers end up suffering financially because they made the wrong choice for a tax return preparer. So, be sure to choose a preparer who knows what they’re doing and has your best interests in mind.
Source: IRS.gov, Charles Schwab,