With tax season quickly approaching, we thought we’d remind you of some things you can do to prepare to file your 2023 federal tax return. The IRS has actually taken steps to help people with this. Visit the IRS website to get access to information like steps you can take to make filing easier. We care about you and your long-term financial success, so we thought we’d give you a rundown of some of the tips they had to share.
Update Records
Gather, organize, and update tax records. Organizing your records makes it easier to prepare a complete and accurate tax return. It 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. Taxpayers are recommended to gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, and other important documents before they file their return. And, don’t forget to notify the IRS if you switch addresses. Also related, notify the Social Security Administration as soon as possible if you legally change your name.
Be Sure Paychecks Have Enough Tax Withheld
Use the IRS’ Tax Withholding Estimator tool, available on their website. Using this tool, taxpayers can potentially determine the right amount of tax to have withheld from their paychecks. This can benefit you 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 or welcoming a child, or for those taking on a second job, to name some examples, this online tool can help you calculate estimated tax payments. In order to change federal tax withholding, update your withholding with your employer, either online or by submitting a new Form W-4 (Employee’s Withholding Allowance Certificate).
But be aware, to make adjustments in time to affect 2023 tax withholding, it’s crucial that you act quickly. Only a few pay periods remain in the year, and payroll systems need time to make withholding changes.
Utilize the IRS’ Online Tools
When preparing for tax filing season, make the IRS website your first stop. Here, you can get the information and tools you need. 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 information about their accounts, and get answers to important tax questions.
Volunteer to Help Eligible Taxpayers File Their Returns
The IRS is looking for people all over the country to become IRS-certified volunteers. Join the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs to help taxpayers with free tax preparation. Visit IRS.gov/volunteers to learn more and register. After signing up, you’ll receive more information about attending a virtual orientation.
Stay Up-to-Date on Changes
A crucial part of the tax planning process is knowing which tax bracket you’ll most likely be in. There are still seven tax rates, but the tax brackets for each rate have shifted to account for inflation. The following changes apply for 2023:
| 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 |
Following an inflation adjustment, the 2023 standard deduction increases to $13,850 for single filers, $20,800 for single heads of household who are unmarried with one or more dependents, or $27,700 for married couples filing jointly. Itemized deductions remain mostly the same. For most filers, just taking the higher standard deduction is more practical. It saves them the hassle of keeping track of receipts. But, if you have enough tax-deductible expenses, itemizing might be worth it.
Reach Out to the Right Professional
Tax professionals play an important part in helping Americans navigate the nation’s current tax system. It’s important that you reach out to a qualified professional with skills in tax preparation and accurately filing tax returns. You need to find someone you trust with your most valuable information. Taxpayers suffer financially every year because they’ve made the wrong choice of tax return preparer. So, be sure to choose the preparer suited to you, who knows what they’re doing and has your best interests in mind.
Sources: IRS.gov, Charles Schwab,