Tax Prep for the 2023 Tax Year: 6 Tips
Are you getting ready for another tax prep marathon? Here are six things to keep in mind as you go through it.
It seems like we just went through this for 2022, but here we are again. Time to start thinking about tax preparation. If you haven’t started to get official forms in the mail, you will soon. And if you’re self-employed, we hope you have your receipts and other tax-related documentation organized and stored in a safe place.
Have you experienced changes in your personal or business life that have affected your finances? For example, did you get married or divorced? Have a child? Start a new business, even just gig work on the side? You’ll have new tax laws and new tax forms to learn about. And you may find that your tax bill will be very different for 2023.
Whether or not things have changed in your life since last January, it’s always good to revisit some of the things we might forget about income tax preparation over the course of a year. So here are six tips for you to consider.
Use the correct filing status.
It matters. Check and double-check your name and address, even if they haven’t changed. And don’t forget to sign your tax return. Sounds like common sense, doesn’t it? You’d be surprised at how
The Customers page displays transactions that need additional attention to bring in the money you’re owed.
Pay special attention to the most basic details.
E-file and have your refund deposited directly into your account.
If your refund has been slow to arrive in the past because you’re printing and mailing your return in, consider e-file this year and opt for direct deposit. Your refund will land in your bank account sooner. You can follow its progress by going to Where’s My Refund?
Learn about unfamiliar tax laws and forms.
If you’re filing as self-employed for the first time, your taxes will be different this year. Here are some things you should be thinking about:
● The Schedule C. You’ll have to complete and submit one of these with your Form 1040, which is a complicated tax form. In fact, if you have multiple types of businesses with different names and structures, you’ll have to fill out more than one.
● New 1099s. You may have received a 1099-INT or 1099-DIV before because of interest and dividends you earned. Depending on how you’re paid for your side gig or small business, you could receive a 1099-NEC, Nonemployee Compensation or a 1099-MISC, Miscellaneous Income. If you received more than $5,000 in payment for goods or services through Square or Venmo, for example, you should get a Form 1099-K, Payment Card and Third Party Network Transactions.
● Health insurance premiums. If you had to start buying your own health insurance instead of going through an employer, you should be able to deduct your premiums on the Schedule 1, Additional Income and Adjustments to Income, which feeds into the Form 1040.
Your customers will be likely to pay faster if you make it easier for them to do so.
Part II of the Schedule 1, where you’ll enter your self-employed health insurance premiums
See exactly how life events might affect you.
The IRS has a page with links to the types of tax changes people experiencing major life events might encounter. If you’d rather talk to a human being about these issues and avoid IRS jargon, you can contact us for guidance.
Look out for scammers.
They’re always around, but some scammers get worse during tax season. For example, someone could be trying to file for unearned unemployment and using your identity to do so. If you get a Form 1099-G, Certain Government Payments, out of the blue that isn’t yours, report this to the state agency that issued it. You may also get phone calls from people who say they represent the IRS, asking for personal information like your social security number. The IRS does not make unsolicited phone calls or send email. They send letters through the U.S. Mail.
Beware of “ghost preparers,” too. Do not work with an income tax preparer who will not sign your return or who asks for cash payment and won’t provide a receipt.
Visit the IRS’ Identity Theft Central page for more information.
Get Expert Help.
We’ve provided links to some IRS pages that may be helpful to you. They may also be wordy and hard to understand. We’d be happy to work with you on your taxes, especially if your employment situation has changed drastically or you’ve experienced other major life changes. We can even handle the entire tax preparation and filing process for you. Contact us, and we’ll set aside some time to talk.
