Tax Filing Season Starts Today
The official tax-filing season will start Monday, Jan. 23, and the Internal Revenue Service says the amounts might be different than last year.
“This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,” said acting IRS Commissioner Doug O’Donnell in a Jan. 12 news release. “With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year.”
Some people might be interested in filing their tax returns. taxes According to the IRS, people should be notified as soon as possible. “have all the information they need before they file.” They could be at risk if they don’t. “refund delays” Or you could be required to file an amended returns, the agency stated.
Taxpayers have until Tuesday, April 18, to file their taxes in 2023. That’s because April 15 falls on a Saturday and because the Emancipation Day holiday in Washington falls on Monday. People who need an extension may file it before the deadline, which will move it back to October 16, 2023.
Meanwhile, the IRS has already notified taxpayers that refunds this year are likely to decrease and some people expecting to receive money back may end up owing federal government.
“Refunds may be smaller in 2023,” The IRS said last November. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022. In addition, taxpayers who don’t itemize and take the standard deduction, won’t be able to deduct their charitable contributions.”
It may take longer if someone is eligible for a refund. The IRS warned last year that certain tax returns might take longer to process.
“The IRS cautions taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying bills,” The federal tax agency said November
The agency stated on its website, Dec. 23, that it still had 1.91 million individual returns unprocessed that it received in 2022. This includes returns for 2021 and late-filed returns. “Of these,” It was added. “1.49 million returns require error correction or other special handling, and 414,000 are paper returns waiting to be reviewed and processed.”
What’s Different
There may be significant changes for parents with children. If their earnings fall below a certain threshold, parents can claim a maximum $2,000 child tax credit for the 2022 tax year.
“Initially it was 3,000 per child and it went up to 3,500 per child. In 2021, it jumped up to 8,000 for one qualifying person, or 16,000 for two or more dependents. However, the caps have returned to the 3,000 and 6,000 for one or multiple dependents,” Crystell Harris, CEO of Dream Team Solutions told KATV.
In 2021, a number of Americans received a $1,400 payment for stimulus. This was the third such payment since the beginning of the COVID-19 pandemic. Lynnette Khalfani–Cox is a financial expert. told NPR It was said that “a whole bunch of taxpayers actually received what’s called a recovery rebate credit … and they got $1,400 per person on their 2021 taxes.”
“But now that’s gone” Khalfani-Cox provided information for those filing 2022 taxes.
Separately, 2021 saw a temporary tax cut that allowed for a “$300 deduction for people who don’t itemize and a $600 deduction for married couples,” She continued. “But Congress didn’t extend this deduction in 2022.”
Under the American Rescue Plan of 2021, a controversial rule was passed that required anyone earning $600 or more through online platforms such as PayPal, Etsy and eBay to report their earnings. The IRS was established just days before 2023. announced that it delayed the reporting rule by another year at the least, as O’Donnell told news outlets that the rule sparked widespread confusion.
In the past, the IRS had announced (pdf) higher federal income tax brackets and standard deductions for 2023, which could offset inflation-related adjustments, with a potential boost to paychecks and lower taxes for millions of citizens.
Federal tax agency will increase contribution limits to 401(k), retirement plans in order to help people save more money for retirement and lower income tax rates in certain cases. The 3-cent rate was also introduced. boost The mileage rate is used to deduct tax-deductible business travel expenses in order to offset rising gas prices. It currently stands at 65.5 Cents per mile.
Americans can now contribute up to $22,500 to their 403(b), 401(k) and most 457 plans. This will increase from the $20,500 contribution limit for 2022. Meanwhile, annual contribution limits for IRAs have increased by $6,500 in 2023, up from last year’s limit of $6,000.
Income ranges—which determine eligibility for making deductible contributions to traditional IRAs, Roth IRAs contributions, and Saver’s Credit claims—have all increased in 2023, according to the IRS (pdf).
Bryan Jung contributed to the report.
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