Don't Mess With Taxes

Hello, February. Even though it's the second month of the year, it's the first full month of the annual tax-filing season.

So if you're just now starting to focus on filing your return, don't feel bad or alone. A lot of us are right there with you.

Since February is the shortest month, even with this year's extra Leap Year day, I'll keep the monthly tax moves list brief, too. Here are four tax moves to consider in the next 29 days.

1. Keep an eye out for tax statements. Yesterday, Jan. 31, was the day that employers were supposed to issue W-2 forms to employees and 1099-NEC statements to independent contractors who provided services last year.

Guess what? Some issuers are slow. I got two 1099s today. I'm still missing several other tax documents I need to complete my Form 1040. I'm not freaking out yet. Based on prior year patterns, I expect they'll arrive early next week.

But you can be sure I'm going to keep an eye on my curbside U.S. Postal Service box, as well as my email, where a couple of payers should send me a note that I can download my necessary tax filing documents.

You, too, need to be aware of what statements you need and which are still missing. You can get an idea of what statements you might still be missing by reviewing last year's filing.

If they don't arrive soon, either in the mail or as a notice they're available electronically, you'll need to contact the issuer about their whereabouts.

These myriad statements detail how much money you made last year from job(s), both as a salaried employee or as a contractor/gig worker; investment earnings; unemployment benefits; and even from prize or gambling winnings. Other tax-related documents have important information on items, such as mortgage interest or charitable donations, that can help you trim your tax bill.

I know eager filers are frustrated by having to wait for these documents, but take a breath, brew a cup of herbal tea, and if you must, scream into a pillow. That third option is my go-to move when I'm impatient at tax or any time.

But patience is required here. The IRS gets copies of these third-part reporting statements, and if you file without having the correct data, the IRS will let you know when it discovers the discrepancy.

2. Decide how you'll file: Once you get all your tax statements, it's time to determine how to get that information to the IRS. Most of us will take the electronic filing route, but will we do it ourselves, or get tax help?

If your taxes are simple tax software should suffice. Even if they're more complicated, if you're comfortable filing your own taxes, the computer tax packages can work. You can buy the software or use the manufacturers' online versions. Before shelling out cash, though, see if you can get it at reduced or no cost. Some financial institutions offer their customers discounts on popular software programs.

There's also Free File. Eight companies are offering their tax software this filing season at no cost to taxpayers whose adjusted gross income is $79,000 or less. If you made more, the IRS' Free File Forms option is available.

Lower income and elderly taxpayers also might be able to get more personal help, again for free, from IRS-sanctioned Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) locations nationwide.

If, however, your taxes are more complicated or you're facing some new issues, it could be worthwhile to hire a tax professional. One place to start is the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

Note, however, that most tax pros are already helping clients who came to them much earlier, so your return will be at the end of the filing line.

You can find more on filing options and help for specific groups of taxpayers in my post Ways to file your federal taxes in 2024.

3. Don't forget about the Earned Income Tax Credit (EITC). This tax credit for middle- and lower-income taxpayers is one of the most overlooked tax breaks. Don't join those ranks.

As a tax credit, the EITC is dollar-for-dollar offset of any tax you owe. Even better, it's a refundable tax credit, which means if the amount you qualify for is more than your tax bill, you'll get the excess EITC as a refund.

My most-recent EITC blog post has more on how much the tax credit is worth — as much as $7,430 for some qualifying families — and how to claim it.

But there is a downside. Federal law prohibits the IRS from issuing refunds to filers who claim the EITC (and/or the Additional Child Tax Credit) until Feb. 15. While that's just two weeks away, the reality of the tax processing system means that many likely won't get EITC (or Additional Child Tax Credit) refunds until Feb. 27. Still, better late than never when it comes tax refunds.

4. Get your 2022 return out of the way.  No, that year is not a typo. But it is tax advice for specific taxpayers who last year got more time to finish their 2022 returns. They are in areas that were hit by a major natural disaster.

These taxpayers live in eight states and two U.S. territories were given until Feb. 15, 2024, to file their 2022 returns.

The affected taxpayers who must finish 2022 taxes this month before starting their 2023 returns are in live or have businesses in specific counties in Florida, Georgia, Hawai'i, Illinois, Louisiana; Maine, Massachusetts, and South Carolina, as well as in all of Guam and the Northern Mariana Islands.

In most of the cases, these taxpayers with extra filing time had filed last year for extension to get their returns to the IRS. You can find more on the upcoming mid-February due date in these places in my post Disaster area deadline for 2022 taxes is Feb. 15 in 8 states and 2 U.S. territories.

More February tax moves: OK, that's definitely enough tax tasks to consider, especially as the ol' blog's first February item. But if you do want more tax tasks for this month, check out the ol' blog's right column.

As usual, there you'll find some additional tax-wise ways to fill the rest of February's 29 days this year. They're listed under the February Tax Moves heading, just beneath the countdown clock that's keeping track of how many days until we get to Tax Day 2024, which is April 15 for most of us.

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