Preparing For Taxes in 2023
7 Tips for Filing Taxes This Season
Tax season is here and there are many things we can do to make sure we are prepared and ready to file by the deadline on April 18th. Tax season is the time of year in which we file, report, and pay any taxes owed from the previous year. The tax year is the actual year where you earn income, pay income taxes, and make charitable contributions. So during this 2023 tax season, we are filing taxes for the 2022 tax year.
The more prepared you are, the easier things will be when April 18 rolls around. There are several things any taxpayer can do to set themselves up for success this year. Careful planning and preparation can ensure a timely refund that can then be put in savings, invested, or put towards bills that need paying. Here are some helpful tips for all taxpayers as they prepare to file their 2023 taxes.
- File electronically and set up direct deposit. This is the key to getting the fastest refund. Most people without any issues are able to receive their refund within 21 days if they file electronically and choose direct deposit. Choosing direct deposit also helps avoid a lost or stolen refund check.
- File for an extension now if you need one. Don’t wait until the deadline of April 18 to decide you are not going to be able to file on time. You can file for an extension to automatically move your deadline to October 16 with Form 4868. On the form, you need to make a reasonable estimate of your tax liability for 2022 and pay any balance due with your request.
- Keep your tax information organized as you begin to receive and gather your documents. Find a folder to keep things all in one place. This will keep all of your important documents together and keep them easily accessible. Here is a list of the documents that you will need to gather in order to be ready to file:
- Last year’s federal and state returns
- Documents for deductions (charitable, medical, business, and retirement)
- Income documents – W2 or 1099
- 1098 to show the interest paid on a mortgage or student loan
- 1098T – tuition statement for higher education expenses
- Social security numbers for family members
- Any federal estimated tax payments you made during the year
- Maximize your deductions. Be sure to deduct everything that you can from your taxes. Some examples of deductions would be deductions for being over 65, business expenses, charitable donations, social security tax exemptions, and retirement plan contributions.
- Itemize your tax deductions. This can help you potentially save a substantial amount of money. This is most helpful to people that own a home, live in a high-tax area, or are self-employed. If your qualified expenses add up to more than the 2022 standard deduction, then itemizing your deductions is worth taking the time to do. The standard deduction for 2022 is $12,950 for singles and $25, 900 for married couples filing jointly. Itemizing can take place for mortgage interest, charitable donations, a portion of medical expenses, and home office.\
- Protect yourself from tax fraud. Tax scams are at an all-time high. Fraudulent emails, texts, and fake websites are all adept at luring unsuspecting victims. It is critical that everyone refrains from sharing financial information with anyone that they don’t know and trust. All taxpayers should know that the IRS will never threaten someone or demand payment. Phishing scammers are skilled at creating a false sense of security with their victims. They replicate trusted logos, imitate legitimate companies, and pretend to be friends or family members. There is usually an urgency to the scam that will lead the victim to believe there will be severe consequences such as frozen accounts or personal injury.
One common example of identity theft through a phishing crime is setting up a website that looks identical to a bank. Then the scammer sends out emails from that bank requesting the recipients input their personal banking information to update their records. Then the scammer will use that information to access the victim’s banking account. Your bank would NEVER ask for personal identification information through email, text, or incoming phone calls.
- Contribute to your HSA (Health Savings Account). A health savings account is a personal savings account that can only be used for qualified healthcare expenses. Eligibility for an account depends on enrollment in a high-deductible health plan (HDHP). You can claim a tax deduction for contributions you or someone other than your employer make to the HSA. Contributions made by your employer may be excluded from your gross income. The contributions remain in your account until you use them. The interest or other earnings on the assets in the account are tax-free. An HSA can help you deduct medical expense costs from your taxes.
It is crucial to check and double-check all of the information on your tax forms. Check spelling, numbers, and information for accuracy. Double-check everything before you submit it so that you don’t have to fill it all out again. The IRS recommends creating a secure online account at IRS.gov/account. This account can be used to view recently filed tax returns, and taxes owed, make payments, apply for payment plans, and access your tax records. This site allows people to access the latest information available to you about your federal tax account.
Jarrettsville Federal Savings and Loan put down roots in the community in 1869 as a strong, stable financial institution. Over the years, we have developed relationships that span generations. Our 154-year tradition of community banking helped us to grow.
Today, we continue to thrive, with checking, savings, and loan products that meet our customer’s needs, technology that brings us into the future, and community service that gives back to our customers. For support during this tax season, contact us or stop by and visit us at our branch office in Jarrettsville.