Saving & Investing
Tax Deadline Is Near!
Tax season is underway in the United States, and for many, the prospect of filing tax returns can be intimidating, often leading to procrastination. To alleviate the stress of looming deadlines, it's advisable to start organizing your documents as early as possible.Navigating the complexities of the tax system can be daunting, whether you opt to handle your taxes independently, seek assistance from a tax clinic, or enlist the expertise of a professional. Courtney Alev, a consumer financial advocate for
Credit Karma, suggests taking a patient approach: "Take a breath. Allocate some time, perhaps an hour or a weekend, to tackle the task. You might find it's simpler than anticipated."
For those finding the process perplexing, numerous free resources are available to provide support. Here are key points to consider:
Deadline for Filing Taxes:
Taxpayers have until April 15 to submit their 2023 returns.
Essential Documents for Filing:
While specifics may vary based on individual circumstances, typical requirements include:
- Social Security number
- W-2 forms for employees
- 1099-G for the unemployed
- 1099 forms for the self-employed
- Records of savings and investments
- Documentation for deductions and tax credits (e.g., educational expenses, medical bills, charitable donations, etc.) For a comprehensive document list, consult the IRS website.
Filing Process:
Tax returns can be filed online or by mail, with electronic filing significantly expediting processing times compared to paper filing.
Available Resources:
- Direct File, an IRS program allowing free online federal tax filing (currently available in select states)
- Free guided tax preparation for individuals earning $79,000 or less annually
- Interactive tax assistant tool for answering queries based on user information
- Directory of licensed tax preparers and IRS-funded programs like VITA and TCE, offering free tax assistance
Avoiding Common Mistakes:
To prevent errors in tax returns, consider:
- Ensuring accuracy of name as per Social Security card
- Retrieving tax statements for electronically delivered documents
- Reporting all income sources, including multiple jobs
Child Income Credit Enhancement:
Proposed legislation aims to augment the child tax credit, potentially benefiting millions of children from low-income families.
Addressing Errors and Late Filings:
In case of mistakes, the IRS typically conducts an audit requiring additional documentation, without severe consequences for minor errors. Late filings can incur penalties, though arrangements can be made for payment plans or penalty reduction under certain circumstances.
Guarding Against Scams:
Remain vigilant against tax scams, especially during tax season, and verify any claims or promises made by tax preparers.
Document Retention and Tax Extensions:
Maintaining copies of tax returns for up to seven years is advisable. If unable to meet the filing deadline, consider filing for an extension, remembering that it defers the filing deadline but not the payment deadline.
Penalties for Late Filings:
Failure to file taxes on time may result in penalties and interest on unpaid taxes, though special circumstances may warrant penalty removal or reduction. Payment plans are available for managing outstanding tax liabilities.
By familiarizing oneself with these considerations and leveraging available resources, navigating the tax season can be made more manageable and less stressful.
From: The Independent