The 2024 tax season is rapidly approaching, which means it’s time to start preparing to file your 2023 tax return. With some planning and organization, you can make the tax filing process smoother and potentially get your refund faster.
When Does The 2024 Tax Season Start?
The IRS has announced that the 2024 tax season will begin on January 29, 2024. This is when the IRS will start accepting and processing 2023 tax returns. While you can prepare your return before this date, you cannot officially file until January 29.
However, if you qualify for the IRS Free File program or new Direct File pilot, you may be able to submit your return early and have it held until the IRS starts processing returns.
Key Dates
Here are some other important dates to know for the 2024 tax season:
- January 12: IRS Free File opens. Tax returns can be prepared and held for e-filing.
- January 29: IRS starts accepting and processing 2023 tax returns. This marks the official start of the 2024 tax season.
- February 27: Projected date for early Earned Income Tax Credit and Additional Child Tax Credit refunds to be available in bank accounts for those claiming these credits who file electronically with direct deposit.
- April 15: Tax filing deadline for most taxpayers.
- April 17: Tax filing deadline for Maine and Massachusetts residents.
Changes To Be Aware Of For 2023 Taxes
While filing your taxes might seem routine, it’s important to be aware of any tax law and policy changes each year that could impact your tax return. Here are some key things to know:
- Expanded tax brackets: The income ranges for each tax bracket widened by approximately 7% due to high inflation. This means you may fall into a lower bracket.
- Higher standard deduction: The standard deduction increased to $27,700 for married joint filers and $13,850 for single filers.
- Delayed 1099-K reporting: The threshold for third-party payment networks like Venmo to issue 1099-K forms for business transactions resets from $600 to over $20,000 in aggregate payments.
- Enhanced energy credits: Credits worth thousands are available for electric vehicles and energy-efficient home upgrades.
How To Prepare For Tax Season
Getting organized early is key to stress-free tax preparation. Follow these tips:
1. Gather Documents
Pull together all tax forms and documents you’ll need, such as:
- W-2s from employers
- 1099s from banks, clients, etc.
- Receipts for deductible expenses
- Records of healthcare coverage
Store paper documents neatly and back up digital copies.
2. Review Last Year’s Return
Get a copy of your 2022 tax return to use as a guide for 2023. Compare income, deductions, credits claimed and more to anticipate what you might need this year.
3. Track Mileage
If you use your personal car for business, be sure to keep ongoing mileage logs. The 2023 business standard mileage rate is 65.5 cents per mile.
4. Contribute To Retirement Accounts
Reducing taxable income is key to lowering your tax bill. Make any 2023 contributions to workplace retirement plans like 401(k)s by year-end or contribute to IRAs up until the April 2024 tax deadline.
How To File Your 2023 Tax Return
Once you have all your documents in order, it’s time to prepare and file your 2023 tax return.
Should You File Early?
Filing early has several potential benefits:
- Faster refund: Most refunds are issued by the IRS within 21 days when you e-file with direct deposit. Filing early means getting your refund sooner.
- More time if questions arise: Getting your return done ahead of the rush gives you breathing room if the IRS flags your return for review.
- Avoid procrastination: Completing your return early gets your least favorite financial task over with.
So in most cases, filing early is advantageous. Just be sure you have all your paperwork in order before submitting.
Filing Options
You have several options when it comes to preparing and filing your 2023 tax return:
- DIY: Use tax software or IRS fillable forms. Best for simple returns.
- Enlist help: Work with a tax pro like a CPA or enrolled agent. Smart for complex returns.
- IRS Free File: This free guided tax prep software is available to taxpayers earning $73,000 or less.
- IRS Direct File: Eligible taxpayers can file simple returns for free directly through the IRS online.
How To Pay Any Taxes Owed
Note that even with an extension to file, any tax payment is still due on April 15, 2024 to avoid penalties and interest. Pay by:
- Direct transfer from your bank account
- Debit or credit card through a processor
- Check or money order
You can also set up a payment plan if needed.
By starting the tax preparation process now, gathering all your documents, tracking deductions, and filing as early as possible once the IRS starts accepting 2023 returns, you can streamline the stressful tax season. Consult a tax professional like a CPA if you have a complex tax situation. And don’t hesitate to use helpful IRS tools and resources to make filing your taxes go smoothly.