For many people filing US tax returns, especially those filing for the first time, it can be a daunting task that is often left to the last minute. But if you want to avoid the stress of an impending deadline, start planning as soon as possible.
Whether you do your taxes yourself, go to a company that helps with taxes, or hire a professional, navigating the tax system can be complicated and stressful. Courtney Alev, a consumer financial advocate with Credit Karma, recommends being kind to yourself.
“Take a break. Take some time off, set a time or revise it over the weekend. Hopefully you’ll find it’s a lot easier than you think,” Alev said. .
If you find the process too confusing, there are plenty of free resources to help you get through it.
Here are some things you should know:
WHAT IS THE DEADLINE TO FILE TAXES?
Taxpayers have until April 18 to file their returns from 2022.
WHAT DO I NEED TO FILE MY TAX RETURN?
Although the required documents may depend on your individual case, here is a general list of what everyone needs:
- Social Security number
- W-2 forms, if you are employed
- 1099-G, if you are unemployed
- 1099 forms, if you are self-employed
- Savings and investment records
- All eligible deductions, such as education expenses, medical expenses, charitable donations, etc.
- Tax credits, such as child tax credit, retirement savings contribution credit, etc.
To find a more detailed list of documents, visit the IRS website.
Tom O’Saben, director of tax content and government relations for the National Association of Tax Professionals, recommends gathering all your documents in one place before you start your tax return and also having your documents from last year. if your financial situation has changed drastically.
Theresa Grover, site coordinator for the Volunteer Income Tax Assistance (VITA) program at Northeast Wisconsin Technical College, also encourages taxpayers to create an Identity Protection PIN with the IRS. to guard against identity theft. Once you have created a number, the IRS will need it to file your tax return.
HOW DO I FILE MY TAXES?
You can file your taxes online or on paper. However, there is a big time difference between the two options.
Filing on paper can take up to six months for IRS processing, while filing electronically cuts it down to three weeks.
WHAT RESOURCES ARE AVAILABLE?
For those earning $73,000 or less a year, the IRS offers free guided tax preparation that does the math for you. If you have questions while working on your tax forms, the IRS also offers an interactive tax assistant tool that can provide answers based on your information.
Beyond popular companies like TurboTax and H&R Block, taxpayers can also hire licensed professionals like CPAs. The IRS offers a directory of tax preparers in the United States.
The IRS also funds two types of programs that provide free tax assistance: VITA and the Tax Counseling for Seniors (TCE) program. People who earn $60,000 or less per year, who have a disability, or who speak little English are eligible for the VITA program. Those who are 60 or older are eligible for the TCE program. The IRS has a site to locate organizations that host VITA and TCE clinics.
If you have a tax problem, there are clinics across the country that can help you with these issues. Generally, these tax clinics also offer services in other languages such as Spanish, Chinese, and Vietnamese.
HOW CAN I AVOID ERRORS ON MY TAX RETURN?
Many people worry about getting in trouble with the IRS if they make a mistake. Here’s how to avoid some of the most common:
- Check your name on your Social Security card.
When working with clients, O’Saben always asks them to bring their Social Security card to verify their number and legal name, which can change when people get married.
“You may have changed your name, but you didn’t change it with Social Security,” O’Saben said. “If the Social Security number does not match the first four letters of the last name, the report will be rejected and this will delay processing.”
- View tax returns when you’ve opted out of receiving paper mail.
Many people like to opt out of snail mail, but when you do, you can also include your tax documents.
“If you haven’t received anything in the mail, that doesn’t mean there isn’t information you should be aware of and report accordingly,” O’Saben said.
- Be sure to report all of your income.
If you had more than one job in 2022, you need W-2 forms for each, not just the job you ended the year with, says Christina Wease, acting director of the Tax Clinic. Michigan State University.
Also, if you have a business that uses PayPal or Venmo as a service, you need to report that on your tax return. By 2022, use of these services must be reported if they have totaled 200 transactions during the calendar year and more than $20,000 in sales of goods or services.
WHAT IF I MAKE A MISTAKE?
Mistakes happen, and the IRS takes different approaches on a case-by-case basis. Generally, if you make a mistake or something is missing from your tax records, the IRS will check it, Alev said. An audit means the IRS will ask you for more documentation.
“In general, they are very understanding and eager to work with people. You’re not going to get arrested if you type in the wrong field,” Alev said.
WHAT IF I HAVE NOT FILED A DECLARATION FOR YEARS?
Wease explains that you can file your taxes late, and if you were supposed to get a refund, you could still get it. If you haven’t filed in years and you owe the IRS money, you may face penalties, but the agency can work with you to manage payment plans.
HOW CAN I AVOID SCAMS?
According to the IRS, tax season is the perfect time for tax scams. These scams can come from phone, text, email and social media. The IRS does not use any of these means to communicate with taxpayers.
Sometimes scams are even exploited by tax preparers, so it’s important to ask lots of questions. If a tax preparer says you’ll get a larger refund than you received in previous years, for example, that may be a red flag, O’Saben said.
If you can’t see what your tax preparer is working on, get a copy of the tax return and ask questions about each of the entries.
HOW LONG SHOULD I KEEP COPIES OF MY TAX RETURNS?
It’s always good practice to keep track of your tax returns, in case the IRS audits you for a paper you filed years ago.
Wease and O’Saben recommend keeping copies of your tax return documents for up to seven years.