As we bid farewell to 2022 and welcome 2023, it’s never too early to start planning your finances for the coming year. A significant aspect of financial planning is tax filing. This comprehensive guide will provide you with key dates for tax filing in 2023 and reasons why you should start preparing now. According to a survey by the National Foundation for Credit Counseling, 26% of Americans don’t feel confident they can prepare their taxes without assistance. This guide aims to change that.
Background: Understanding Taxes and Their Importance
Before we delve into the specifics of tax filing dates for 2023, let’s first understand some background information on what taxes are and why they are important. Taxes are a form of revenue collected by governments from individuals or companies based on income, property ownership, goods purchased, or services rendered. This revenue is then used to fund public services such as roads and schools.
Filing taxes accurately and on time is crucial because failure to do so can result in fines or legal action by the government. Moreover, proper tax planning can help individuals maximize deductions and credits available under current laws. For example, in 2022, John, a freelance graphic designer, was able to reduce his taxable income by $3,000 by taking advantage of a home office deduction.
Key Tax Filing Dates For The Year 2023
The IRS has announced that the 2023 tax filing season will officially begin on January 23. Here are some key dates related to federal income tax filings for individual taxpayers:
January:
- January 15th – Payment deadline for fourth-quarter estimated taxes.
- January 23rd – Official start to 2023 tax filing season.
April:
- April 15th – Deadline to file individual federal income tax returns (Form1040) unless you get an extension; also the deadline if you owe money after submitting Form1040.
- April- Final date for contributions (regular/traditional IRA) towards last year’s retirement account contributions.
June:
- June- Last date for making non-corporate entity retirement account contributions
September:
- September- Last date(some banks may be earlier)to make Estimated Quarterly Taxes Payments(Third Installment). Individuals who need more time might be able to file their extensions (Note: an extension to file is not the same as an extension to pay).
October:
- October 15th – Deadline to file individual federal income tax returns (Form 1040) if you received an automatic six-month filing extension.
Why Should You Start Planning Now?
While the specific dates for tax filings in 2023 may seem far away, it’s important to start planning early. Here are some reasons why:
Early preparation can save money and time
By starting your financial planning process now, you can identify potential deductions and credits that could save you money on your taxes. Additionally, by organizing your paperwork early, filing your taxes will be faster and easier when it comes time to do so. For instance, Sarah, a small business owner, started organizing her receipts and invoices in January. By the time April rolled around, she had all her documents in order and was able to file her taxes without any stress.
Avoid late fees and other penalties
If you miss any of the key deadlines listed above or make inaccurate payments/returns for expected taxes then one might subject themselves with unnecessary burden of late fees and interests which would impact their credit scores etc.. In 2022, the IRS reported that about 14% of taxpayers filed their taxes late, resulting in millions of dollars in penalties.
Changes in Tax laws
Government keeps revising rules frequently basis which policy makers take appropriate action accordingly. We never know what kind of changes we’ll see down the road but staying ahead of them will put us on a better chance for success. For example, the Tax Cuts and Jobs Act of 2017 made significant changes to the tax code that affected millions of taxpayers.
Conclusion: Start Preparing for Tax Season Now
In summary, preparing early for tax season is crucial. By knowing the key dates related to taxable events, individuals can plan ahead effectively so they don’t feel overwhelmed later on in rush situation. It’s never too early or too late to begin thinking about next year’s finances – get started today!
FAQs
- When is the tax filing deadline for 2023? Answer: The exact tax filing deadline for 2023 has not yet been announced by the IRS, but it is typically April 15th each year unless that date falls on a weekend or holiday, which can push the deadline back. Be sure to stay informed about any updates or changes from the IRS related to your tax-filing deadlines.
- How early should I start planning my taxes for 2023? Answer: It’s never too early to start planning and preparing your taxes. Good financial habits and record-keeping throughout the year can save you time, money, and stress come tax season. Consider meeting with a financial advisor or accountant in late fall of each year to review your finances and discuss any strategies you may need for optimal tax efficiency.
- Can I file my own taxes online in 2023? Answer: Yes, most taxpayers have the option to file their taxes digitally using popular software programs like TurboTax, H&R Block Online, or TaxAct beginning in January each year. E-filing your returns can help ensure accuracy, faster processing times by the IRS, and possibly even earlier refund payments if applicable.
