The countdown is on! While the holiday cheer fills the air, it’s also time to start thinking about the upcoming tax season 2024 for your 2023 income. Fear not, savvy taxpayer! This year, the IRS wants to make filing smoother than ever with some key updates and reminders to ensure a stress-free refund ride.
Let’s dive into the essentials:
1. Power Up Your IRS Online Account: Tax Season 2024
No more paper chase! The IRS Online Account is your digital hub for tax information. Here, you can view your tax records, authorize tax professionals, download transcripts, schedule payments, and even check your refund status. This year, they’ve added even more features, like approving the power of attorney requests and electronically signing authorizations directly from your tax pro. Get yourself set up and say goodbye to the filing frenzy!
2. Patience is a Virtue (Especially with Refunds):
Remember, refunds come in all shapes and speeds. While the IRS aims for most refunds within 21 days, unforeseen circumstances (like missing information or potential fraud) can cause delays. Don’t rely on your refund for major purchases or bill payments until it’s safely deposited in your account. And for those claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), expect to wait until mid-February 2024. But hey, patience is a virtue, and that sweet refund feeling will be worth it!
3. Stay on Top of Your Tax Bills:
Don’t get blindsided by an unexpected tax bill next year. If you have income beyond your wages (think unemployment, self-employment, gig work, or even digital assets), you might need to make estimated or additional tax payments throughout the year. Use the IRS Tax Withholding Estimator to assess your situation and avoid any unwelcome surprises come filing time for Tax Season 2024. Remember, being proactive saves you headaches and keeps your finances on track.
4. Gather Your Arsenal of Documents:
Think of yourself as a tax warrior, and your documents are your weapons. Organize your 2023 income forms, like W-2s, 1099s, and digital asset transaction records, in a safe and accessible place. This includes both paper and electronic copies. Having everything at your fingertips ensures accurate filing and avoids unnecessary delays. Remember, a prepared warrior is a victorious warrior! Make sure, you are Ready for Tax season 2024.
5. Breathe Easy, the 1099-K Threshold is Delayed:
Remember all the confusion about the new $600 1099-K reporting threshold for third-party payment networks? Well, fret no more! The IRS listened to your concerns and delayed the implementation for 2023. This means you won’t receive unexpected forms for minor transactions. Phew! But don’t let your guard down completely. The threshold is still planned to drop to $5,000 in Tax season 2024, so keep an eye out and understand why you receive any 1099-K forms to ensure accurate reporting. Make sure, you are Ready for Tax season 2024.
6. Go Green, Get Credits:
If you embraced the eco-friendly lifestyle and bought an electric vehicle in 2023, you might be eligible for some sweet tax credits! Check out the Inflation Reduction Act of 2022 to see if you qualify for the new clean vehicle credit. Just remember to grab your vehicle’s VIN and file Form 8936 with your return. You can also claim credits for home energy improvements. The Act expanded the credit amounts and types of qualifying expenses, so make sure to review Form 5695. Go green, save green, win-win!
7. Speed Up Your Refund with Direct Deposit:
Skip the paper check delays and choose direct deposit! It’s the fastest way to get your refund and avoid the mailbox blues. Don’t have a bank account? No worries! Explore options like FDIC-insured banks, credit unions, or even veteran banking programs. Mobile apps and prepaid debit cards with proper routing and account numbers can also be your refund allies. Just check with your provider to confirm the details.
8. Don’t miss the deadline!
The last quarterly tax payment for tax year 2023 is due on January 16, 2024. This applies to taxpayers who make estimated tax payments, such as self-employed individuals, freelancers, and gig workers. If you haven’t already made your fourth-quarter payment, be sure to submit it by the deadline to avoid penalties and interest charges. Be yourself Ready for Tax season 2024.
To make your quarterly tax payment, you can use the IRS’s online payment system, Direct Pay, or mail a check or money order to the IRS. You can also make your payment in person at an authorized IRS payment location.
If you’re not sure how much you owe in estimated taxes, you can use the IRS’s Tax Withholding Estimator tool. This tool will help you calculate your estimated tax payments for the year.
Remember, preparation is key to a smooth and successful tax season! Use these tips to gather your documents, understand the latest updates, and maximize your refund. With a little planning and these helpful resources, you can conquer tax season 2024 like a pro and enjoy the satisfaction of a job well done (and maybe even treat yourself to something nice with that refund!).
Bonus Tip: Stay informed! Check the IRS website and subscribe to their email updates for the latest news and announcements. Knowledge is power, and in the tax world, it’s your ticket to a stress-free filing