Navigating the tax system can be complicated and stressful. Here’s what you need to know, including how to avoid some of the most common tax return mistakes.
WASHINGTON — For many people filing U.S. tax returns — particularly those doing so for the first time — it can be a daunting task that’s often done until the last minute. But if you want to avoid the stress of the upcoming appointment, start organizing as soon as possible.
Whether you do your taxes yourself, go to a tax clinic, or hire a professional, navigating the tax system can be complicated and stressful. Courtney Alev, a consumer finance attorney for Credit Karma, recommends that you take it easy.
“First, take a breath. Take your time, take an hour or go through it on the weekend. Hopefully you’ll see that it’s a lot easier than you think,” Alev said.
If you find the process too confusing, there are many free resources to help you navigate it.
Here are some things you need to know:
WHEN IS THE TAX SUBMISSION DEADLINE?
Taxpayers have until April 18 to file their returns from 2022 onwards.
WHAT DO I NEED FOR MY TAX RETURN?
While the documents required may depend on your individual case, here is a general list of what each one requires:
-Social Security number
—W-2 forms if you are employed
—1099-G if you are unemployed
—1099 forms if you are self-employed
—Savings and investments documents
—Any allowable deduction, e.g. B. Education expenses, medical bills, charitable donations, etc.
— Tax reductions such as child allowance, old-age credit, etc.
For a more detailed list of documents see IRS website.
Tom O’Saben, Director of Tax Content and Government Relations at the Federal association of tax clerks, recommends collecting all documents in one place before starting the tax return and also having the documents from the last year ready if your financial situation has changed significantly.
Theresa Grover, site coordinator for the Voluntary Income Tax Assistance Program (VITA). at Northeast Wisconsin Technical College, also recommends taxpayers create one Identity Protection PIN Number with the IRS for identity theft protection. Once you create a number, the IRS needs it to file your tax return.
HOW DO I REGISTER MY TAXES?
You can either submit your file Taxes online or on paper. However, there is a big time difference between the two options. The IRS can take up to six months to process the paper filing, while electronic filing is reduced to three weeks.
WHAT RESOURCES ARE THERE?
For those making $73,000 or less per year, the IRS offers Free guided tax preparation that does the math for you. If you have questions while working on your tax forms, the IRS offers one, too Interactive tax assistant Tool that can provide answers based on your information.
In addition to popular companies like TurboTax and H&R Block, taxpayers can also hire licensed professionals like accountants. The IRS offers a Directory of Tax Advisors across the United States.
the IRS also funds two types of programs who offer free tax assistance: VITA and the tax advice for older people (TCE). People who earn $60,000 or less per year, have disabilities, or have limited English speaking qualify for the VITA program. Those who are 60 or older qualify for the TCE program. The IRS has a website for locating organizations hosting VITA and TCE clinics.
If you have a tax problem, there is clinics across the country which can help you solve these problems. Typically, these tax clinics also offer services in other languages such as Spanish, Chinese, and Vietnamese.
HOW CAN I AVOID ERRORS IN MY TAX RETURN?
Many people fear getting in trouble with the IRS if they make a mistake. Here’s how to avoid some of the most common:
- Check your name on your social security card.
When working with clients, O’Saben always asks them to bring their social security card to verify their number and legal name, which can change when people get married.
“You may have changed your name, but you didn’t change it on Social Security,” O’Saben said. “If the social security number does not match the first four letters of the last name, the return will be rejected and that will delay processing.”
- Search for tax statements if you have disabled paper shipping.
A lot of people don’t mind snail mail, but if you do, it may include your tax documents as well.
“If you haven’t received anything in the mail, that doesn’t mean there isn’t an information document that you need to be aware of and report appropriately,” O’Saben said.
- Make sure you state all of your earnings.
If you had more than one job in 2022, you’ll need everyone’s W-2 forms — not just the one from the job you ended the year with, says Christina Wease, interim director of the Tax Clinic at Michigan State University.
Also, if you have a business that uses PayPal or Venmo as a service, it must be the case specified in your tax return. For 2022, the use of these services must be reported if they amounted to 200 transactions and more than $20,000 in sales of goods or services in the calendar year.
WHAT IF I MAKE A MISTAKE?
Mistakes happen, and the IRS handles them differently on a case-by-case basis. Generally, if you make a mistake or something is missing from your tax records, the IRS will audit you, Alev said. An audit means the IRS will ask you for more documentation.
“In general, they are very understanding and willing to work with people. You will not be arrested if you enter the wrong field,” Alev said.
WHAT IF I HAVEN’T FILED IN YEARS?
Wease explains that you can be late filing taxes, and if you should get a refund, you might still get it. If you haven’t filed for years and you owe the IRS money, you may face penalties, but the agency can work with you to manage payment plans.
HOW CAN I AVOID FRAUD?
Tax season is the best time for tax fraud, according to IRS. These scams can be done via phone, SMS, email, and social media. The IRS does not use any of these means to contact taxpayers.
Sometimes scams are even carried out by accountants, so it’s important to ask lots of questions. For example, if an accountant says you’ll get a refund that’s larger than what you’ve received in previous years, that can be a red flag, O’Saben said.
If you can’t see what your accountant is working on, get a copy of the tax return and ask questions about each entry.
HOW LONG SHOULD I KEEP COPIES OF MY TAX RETURNS?
It’s always good practice to keep a record of your tax returns, just in case the IRS checks you on an item you reported years ago. Both Wease and O’Saben recommend keeping copies of your tax return records for up to seven years.
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