Tax season has begun! Don’t feel intimidated or wait until April to start thinking about your taxes. Get your potential tax return sooner to add to your savings!
Early preparation can set you up to excel and meet important deadlines. While filing your taxes late can incur penalties. That’s why we suggest identifying key documents, getting organized, and understanding application deadlines now.
- Gather important documents and relevant information. (See below “Key Documents”)
- Identify which outlet you will use to prepare your taxes.
- Do-it-yourself options include, but are not limited to, TurboTax, H&R Block, and TaxAct. These all have different pricing options available, ranging from free to over $100 in premium packages.
- You can also opt for hiring a tax professional, such as a certified public accountant. This option tends to be more expensive, however, it may help avoid mistakes.
- Identify the correct deductions (See below “Helpful Information”)
- Check if you owe tax or are entitled to a refund, depending on feedback from the automated tax service or the tax preparer.
- File your tax return electronically or physically. If you send it physically, make sure to have the envelope postmarked by the April 18th filing deadline.
Make sure to pay what you owe by your original filing due date. You can submit your electronic payment through the IRS Direct Pay app.
If you are owed a refund and you filed electronically with your relevant bank account information, the IRS will send a direct deposit to the identified account.
Jan 23rd
IRS goes live for electronic tax returns. This is the first day the IRS will begin accepting and processing 2022 tax year returns. Paper tax returns are processed a week or two later.
Feb 1st
By this date, you should have received your W-2 form from the employer(s) you worked for in the 2022 tax year. Contact HR/Payroll in the event these documents haven’t been successfully delivered.
Feb 1st
By this date, you should have your 1099 statement(s). The report on non-employee compensation, bank interest, dividends, and distributions from your retirement plan.
Apr 18th
Official national due date, known as “Tax Day,” to file 2022 tax return or request an extension. To file an extension, print or mail Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax.
- Submit by this date if you don’t require an extension to avoid penalties and interest.
- A complete and error-free tax filing submitted by the due date is better than a submission with errors submitted early!
Oct 16th
Due date to file after requesting an official extension on their 2022 tax returns.
Generally, you will receive your state tax refund within 30 days of the electronic filing date or the postmark date. For federal tax refunds, expect between 8 – 21 days.
- This form comes from employer(s) and reports wages paid to employees and taxes, both state and federal, already withheld.
1099
There are several different variations of this form and they depend on the nature of income made outside of one’s salary. This kind of income can span interest from our bank, dividend from investments, or freelance work.
- This form is used for independent contractors, freelancers, and self-employed individuals for their services. The reporting threshold is $600.
- This form is issued to investors by financial institutions who receive dividends and distributions from any type of investment during the year. The reporting threshold is $10.
- This form is used if you received interest on bank accounts, including money market accounts, certificates of deposit, or savings bonds. The reporting threshold is $10.
- This form is used to report retirement plans, (individual retirement accounts) IRAs, profit-sharing plans, pensions, and annuities. The reporting threshold is $10.
- This is a new documentation addition you want to keep your eyes out for before submitting. These forms are issued by payment settlement entities (PSEs) to report payments made to settle transactions during a calendar year. Credit card companies, Zelle, and PayPal are examples of the kinds of entities producing this form. The reporting threshold is $600.
Make sure to collect personal information, like your Social Security Number and bank account information.
If the IRS sent you letters indicating how much you received in stimulus and advanced child tax credit payments, please have these ready when you file.
If you carry digital assets, like cryptocurrency, NFTs, or stablecoins, make sure to have income documents or records of transactions.
Make sure to collect personal information, like your Social Security Number and bank account information.
Lastly, gather any documents that show amounts paid on deductible items, such as mortgage interest and charitable donations.
Standard and Itemized Deductions
Most taxpayers will opt for the standard deduction instead of itemizing, meaning separately listing expenses such as mortgage interest and charitable contributions.
In 2022, the standard deduction for individual taxpayers is $12,950; $25,900 for taxpayers filing joint returns; and $19,400 for heads of households.
Typically, itemized deductions include Interest paid on a mortgage, charitable donations, medical expenses, property tax, and state income taxes.
For more information on Credits and Deductions, review the linked IRS resource.
Filing your taxes can be very intimidating, particularly for those who are first-time fillers. However, starting early, being organized, and completing your research is the best way to submit your taxes and can significantly help you limit your tax bill in the end. Get started today!
