The IRS has begun issuing “Get Ready” alerts, to remind all US taxpayers that time is running out to make changes to 2023 income and tax withholding, and to begin preparations for the upcoming tax season.
“A little advance work now can help [you] have the paperwork and information ready to file [your] tax returns quickly and accurately,” the alert states.
You can see their full list of steps you can take now, as well as what’s new and what to consider for the next time you file here: Get Ready to File Your Taxes.
Let’s walk through what the IRS recommends to work on today.
Gather Your Tax Records, Get Them Organized and Updated
“Organizing tax records makes it easier to prepare a complete and accurate tax return,” the IRS says. ‘It helps avoid errors that can slow down refunds and may also help find overlooked deductions or tax credits.”
This is absolutely true, and we’ve seen many cases where missing or unorganized documents result in misreported income (meaning hefty fines and back taxes owed) or missing out on valuable deductions.
Make sure you gather documents on ALL of your income sources, including:
- Income Statements, Paystubs, and W2s from Full-Time Employment
- Unemployment Compensation
- Gig Economy, 1099, and Schedule C Income
- Miscellaneous Income
- Interest Earned
- and any other documents related to your income.
The IRS also reminds you to make sure your address and name are up to date.
Make Sure Your Paychecks Have Enough Withheld, and Make Necessary Changes
“To make adjustments in time to affect 2023 tax withholding, taxpayers need to act quickly,” the IRS states. “Only a few pay periods remain in the year, and payroll systems need time to make withholding changes.”
It’s always important to take some time in Q4 to do an initial calculation of your tax burden and make necessary adjustments. We most commonly see surprises at tax time when our clients go through life-changing events like a marriage or divorce, birth of a child, or taking on a secondary income stream. Many people do not consider how these changes will impact their tax burden and savings, and need to make adjustments either to their tax withholding, their retirement contributions, or their payment plans with the IRS in order to be up to date on taxes and retain as much of their income as possible.
If you wish to make changes, there is still limited time. Contact your CPA asap if you are unsure how recent changes will impact your filing.
Plan to Speed Up Your Refund with E-Filing and Direct Deposit
The IRS states that, “Direct deposit is the fastest and safest way to get a tax refund.”
And, they’re absolutely correct. A paper check is much more likely to get lost in the mail or fall into the wrong hands, when setting up direct deposit means that money goes directly into your bank.
If you’re working with a CPA, you needn’t worry about this. Most CPAs will e-file and coordinate with you to get your bank details on the correct paperwork. E-Filed returns are typically processed faster, which means you get your refund faster.
Choose the Right Tax Professional
“Choosing the wrong tax return preparer hurts taxpayers financially every year…choose your tax preparer wisely.”
The key attributes the IRS recommends looking for in a tax preparer is someone who will contact the IRS if there are questions or issues with the return, a reputable tax preparer (i.e. a CPA) and check their credentials, someone who asks for records and receipts, and a person who has a strong history of successful tax preparation (i.e. good Google reviews, a long-standing license, and clear expertise).
If you are ready to get started on your 2023 federal tax return, please contact us today.
