2023 tax filing need to knows
From the tax return filing deadline to the IRS forms required, getting tax season right isn’t easy. Advisors, accountants and automated accounting tools can help, but the best thing you can do to prevent tax penalties is to develop a complete understanding of the tax process as it works in 2023. Don’t let the last day to file taxes pass without taking action.
Why is effective tax planning so important?
If you’re living and working in the U.S., you probably need to be paying your taxes and meeting the annual tax deadline.
Proper tax planning takes time and effort, but it’s also essential to any good wealth management strategy, maximizing your income and preventing unexpected charges.
Planning your taxes effectively, meeting tax dates and submitting all the proper forms can give you room to benefit from:
No matter the income level, anyone liable to pay taxes must consider their tax plan carefully.
There are many different types of tax planning, from federal income tax planning to small business tax planning to retirement tax planning and estate tax planning.
Before you’re in a good position to begin, you should:
Understand your dependency status
Gather all necessary tax forms
Understand tuition tax credits and student loan interest deductions
The IRS forms
One of the most intimidating challenges when dealing with tax is keeping track of the various forms.
Most people will use an IRS Form 1040 to file a personal income tax return or to report the income they’ve received during the year.
You can find an IRS Form 1040 on the IRS website and complete it manually, or you can access it:
Through the IRS Taxpayer Assistance Center
By calling 1-800-829-3676 and requesting a copy
Through most popular tax software programs
Depending on your financial situation, you might need to complete more forms and schedules on top of the 1040.
You can contact a tax professional for help and advice if you're ever in doubt. All tax forms should be filled out well before the income tax return filing deadline.
The process will run you through the following basic steps:
You will input your basic information.
You will report your income.
You will claim your deductions.
You will calculate your tax.
You will claim your tax credits.
When are taxes due in 2023?
Once you understand the tax forms you’ll need to submit, you need to ask yourself, ‘when are taxes due in 2023?’
You will be liable for late fees and penalties if you miss tax dates.
According to the IRS, if a tax filing deadline for 2023 is missed by more than 60 days, the minimum a person will be charged is 100% of the unpaid tax, or $435 – whichever amount is lower.
So, what is the tax deadline for 2023? The last day to file taxes for the 2022 tax year is April 15th, 2023.
The last day to file taxes for the 2023 tax year will be April 15th, 2024.
Mark your calendar and ensure all relevant documents are submitted by the end of this day, or hefty penalties could be applied to you.
If you pay estimated tax in advance on a quarterly basis, there will be four deadlines to consider each tax year.
These deadlines will always fall in the middle of April, the middle of June, the middle of September and the middle of January.
The next deadline to be aware of for the 2023 tax year is January 17th, 2023.
The quarterly estimated tax deadlines for the 2024 tax year will be:
April 15th, 2023
June 15th, 2023
September 15th, 2023
January 17th, 2024
The last day to file taxes for the 2023 tax year will be April 15th, 2024
The six most common tax filing mistakes
Filing too early - While it’s bad to file late, it’s also potentially harmful to file too early. Wait until you receive all the proper tax reporting documents to prevent making a mistake that will lead to a processing delay.
A missing or inaccurate Social Security Number (SSN) - Each SSN should appear exactly as printed on the Social Security card.
Spelling mistakes - Misspelling names is a simple yet common mistake. Names need to match the name on a person’s Social Security card – no nicknames!
Inaccurate information - With a lot of information to enter, this is easy to do. Whether it’s entering erroneous information on wages, dividends or bank interest, it can result in a delay.
Incorrect filing status - A lot of taxpayers choose the wrong filing status. To get this right the first time, the Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status (especially if more than one filing status applies).
Maths mistakes - Tax preparation software should stop maths errors from being made, from easy additions and subtractions to complex calculations.
The future of tax
While we’d love to know exactly what will happen with tax rates, dates and forms in 2023, the best we can offer are some predictions based on the Biden Administration’s FY 2023 budget.
This was first released on March 28th, 2022, and the proposed changes include:
Increasing the top tax rate to 39.6%
Imposing a minimum tax on wealthy individuals
Taxing some capital gains at ordinary income tax rates
Expanding triggering events for capital gains recognition
Modifying rules for certain grantor trusts
Modifying tax administration for trusts and estates
Taxing IRC Section 1250 property as ordinary income
Taxing carried interest as ordinary income
Limiting like-kind exchanges
Kate has written for leading publications and blue chip companies over the last 20 years.