Get ahead of the game: Tax season 2023 starts early this year. The tax season is quickly approaching, and as they say, the early bird catches the worm. In 2023, the tax season will start earlier than usual, which means it’s time to start preparing now. According to the IRS, the tax season will begin on January 23rd, 2023, a week earlier than the previous year. This early start is designed to give taxpayers more time to prepare and file their taxes before the April deadline.
Why Start Early?
Starting your tax preparation early offers several benefits. For starters, you avoid the last-minute rush that often leads to errors and oversights. By starting early, you have sufficient time to gather all necessary documents and information required for filing your taxes accurately. A study by the National Taxpayers Union Foundation found that taxpayers who file their taxes early are less likely to make mistakes on their returns than those who wait until the last minute.
Tips for Preparing Your Taxes Early
Create a Checklist
Create a checklist of all relevant documents needed for filing your taxes. This could include W-2s from employers, interest statements from banks or other financial institutions – providing an overview of any taxable interest earned throughout the year -, dividend statements from investments you’ve made etc. A comprehensive checklist will ensure that you don’t miss out on any potential deductions or credits.
Organize Your Financial Records
Organize your financial records into categories such as expenses paid on credit cards, deductible purchases like business equipment or home office supplies etc., charitable donations made through receipts issued by charitable organizations etc. A well-organized filing system can save you time and stress when it comes time to file your taxes.
Consult with Experts
Consulting with tax experts can be helpful when addressing specific issues related to taxation procedures. Certified Public Accountants (CPAs) can provide useful guidance regarding deductions available under current laws/rules/regulations applicable within areas like social security income limits or capital gains calculations. For example, a CPA can help you understand how the new tax laws for 2023 might affect your tax situation.
Make Withholding Adjustments
If there are any changes that have occurred since the start of the year, taxpayers will want to update their withholdings. For instance, if you had a new baby in January or later, you should update your W-4 to reflect that. The IRS provides a useful online tool called the Tax Withholding Estimator that can help you determine the right amount of tax to withhold from your paycheck.
Document, Document, Document
Throughout the year, keep track of any deductions you will need to account for later such as mileage expenses, donations to charity, or business expenses, and allocate them. For example, if you use your car for business purposes, keep a detailed log of your mileage, as you may be able to deduct these expenses on your tax return.
Track Crypto Trades
The IRS treats cryptocurrency like property for tax purposes, and traders of digital assets could owe taxes when they make a profit selling or exchanging those assets. If you’ve been trading in cryptocurrency, it’s important to keep detailed records of your transactions, as you’ll need this information when you file your taxes.
Plan Ahead for Changes
If there are changes you anticipate this year that could impact your 2022 return, be sure to look at the tax implications, because they could impact your decision-making. For example, if you’re planning to sell a rental property, you’ll want to understand how this could affect your tax situation.
Taking your tax position seriously involves planning – and it’s recommended to do the research now rather than waiting until tax time rolls around again. The IRS website is a great resource for up-to-date tax information and guidance.
Filing taxes is an essential task that can be daunting if left until the last minute. By preparing for tax season 2023 early, you can save time, money and avoid any errors or stress related to a hurried approach. Start now by creating a checklist of all relevant documents, organizing your financial records and consulting with experts in case you need assistance regarding taxation procedures. Get ahead of the game this year!
Q: Why does tax season start earlier in 2023?
A: The Internal Revenue Service (IRS) announced that they will begin accepting and processing tax returns starting on January 23rd, 2023. This is slightly earlier than previous years to give taxpayers more time to file their taxes before the April deadline.
Q: Is there anything I can do now to prepare for filing my taxes early next year?
A: Yes! It’s always a good idea to get an early start on gathering all necessary tax documents such as W-2s, receipts, and other financial records. Organizing your documentation ahead of time can help streamline your filing process when it comes time to submit your return.
Q: If I file my taxes early in 2023, will I receive my refund sooner than usual?
A: There is no guarantee that you will receive your refund any sooner just because you filed early; however, submitting your return as soon as possible can increase the chances of receiving any owed refunds within a timely manner rather than later in the year or even after December which may cause complications related to annual tax bills or estimated payments due next year depending on each taxpayer’s unique financial situation.