January 2023 Tax Tips

Happy New 2023 Tax Year!
Yes, you heard this upbeat welcome before, like just last year. But things in the tax world this year have to be better than in 2020, 2021, and 2022, right? Right?!?

Last year, the Internal Revenue Service got back on track, at least as far as following the traditional April and October filing deadlines.

Unfortunately, it also followed the same game plan when it came to customer service. Taxpayers and tax pros alike were left hanging on phone lines awaiting answers to questions and guidance for specific tax situations.

In the IRS' defense, it was still digging out of the backlog of paperwork created by COVID-19 pandemic complications. It also was dealing with the final year of distributing coronavirus stimulus payments.

Now, with a new commissioner on the way and more money to add staff and upgrade operations, things will be better. Right? Right? Is this mic working?

I start each year trying to suppress my cynical side, so I'm going to stay optimistic when it comes to the IRS and the 2023 filing season.

The ol' blog's annual tax tips are part of that more positive perspective.

Still not necessarily daily: Long-time readers know that the tax tips have been a regular feature on the ol' blog. The delivery of them has changed a bit over the years, but the current iteration which has been in place for the last couple of years seems to be working well for me and readers.

So with the arrival of 2023, the tax tips again will appear first in the upper right corner of the ol' blog's homepage (and other pages you click on), just beneath the old-school yellow No. 2 pencil tip image. The highlighted tips then will be added to the monthly tax tip pages.

There's no firm posting schedule, but I'm aiming for at least one tip a week. During high filing season of January through Tax Day in mid-April, I'll likely post more frequent tips.

Year-round tip time: Most of the tax advice tidbits through Tax Day will focus on getting that 2022 Form 1040 and schedules filled out and to the IRS on time. But taxes are a perpetual motion machine.

Some people file their tax returns in January. Others aim for the mid-April due date. Some — OK, millions of procrastinators — push their filing back to October by getting an extension. And that's just for the prior year's taxes.

We're already in a new tax year, meaning our 2023 tax liability is now accruing.

Then Mother Nature sometimes throws destructive fits, with major disasters affecting and delaying tax tasks for those in tornado, flooding, hurricane, blizzard, and more paths.

And, of course, there's unforeseen circumstances, like a global health crisis and pandemic.

That's why you'll get a mix of traditional filing tips, alerts about changes, and future tax planning.

Since you're reading this, you know the January 2023 page is live, and you're raring to get started on your taxes. Me, too. So with our hopes high that the 2023 tax filing season and year won't disappoint us again, let's get this tax tips party started!

Tax rates and income brackets for 2022 & 2023 — January is the month when tax years collide. We're getting ready to file our 2022 tax year returns, but we're also starting to make plans that, if implemented properly, will reduce our 2023 tax bills. Key information for both years includes how much tax we owe on our earnings in both years. You can find 2022 and 2023 tax rates and income brackets in the first of the ol' blog's 10-part annual inflation series. At the end of that post, there's a directory to the nine other tax areas affected by annual inflation adjustments. Expect to see those other 9 posts as separate tax tips through this filing season and tax year. (Jan. 1, 2022)
Tax moves to make in January 2023 — With New Tax Year 2023 underway, it's time to start making moves so that filing your return, and beyond, will be easier. Here are four tax moves to make this January to get that process started. (Jan. 3, 2023)
Finish your 2021 tax return — Yes, 2023 just started, meaning most of us will be filing our 2022 taxes this year. But some taxpayers are still working on their 2021 returns with the IRS' blessing. They endured some difficult circumstances and Uncle Sam's tax collector gave them additional time to file that year's returns. Taxpayers in the following five states and U.S. territory have until Feb. 15 to meet that and other tax deadlines —
* Florida taxpayers who are still dealing with the aftermath of deadly Hurricane Ian;
* South Carolina taxpayers who are still dealing with Ian's second landfall;
* North Carolina taxpayers who are still dealing with Ian's move inland;
* Puerto Rico taxpayers who endured Hurricane Fiona;
* Mississippi taxpayers of Hinds County, who suffered a municipal water system failure caused by flooding; and
* Alaska taxpayers who dealt with disruptions from storms and flooding.
Residents of Florida who were hit early last November by Hurricane Nicole also have more time to make their final 2022 estimated tax payment, due this year on Jan. 17. Those Sunshine State 1040-ES filers now have until March 15 to make that fourth 2022 payment. (Jan. 5, 2023)
Business e-filing begins on Jan. 12 — The Internal Revenue Service has set an official start date for the 2023 tax season, but cool your jets eager individual taxpayers. Thursday, Jan. 12 is the day the IRS will start accepting electronically filed business returns. The start of the 2023 filing season for individual tax returns is officially, for now per the IRS, "to be announced" (Jan. 6, 2023)
RALs are still around, but still costly — Lots of people depend on tax refund money early in the filing season. And many filers can't, or won't, wait for the Internal Revenue Service to process their returns and issue their refunds. Instead, they turn to refund anticipation loans, or RALs. The can be helpful and get you your own tax money a bit sooner. Make sure, however, that the short-term loans' added costs are worth it. (Jan. 8, 2023)
Business mileage tax-deductible rate increases in 2023 — Business miles will count for a larger tax deduction in 2023, as the Internal Revenue Service hiked the optional standard rate by 3 cents on Jan. 1. The other potentially adjustable rates, for medical or moving miles, remain in 2023 at the level that was bumped up, due to skyrocketing gas prices, on July 1, 2022. (Jan. 9, 2023)
6 tax & financial tips for lottery winners — Sure, the odds of winning either of the two now huge national lotteries are 1 in 292.2 million. But just in case your numbers do come up in the $360 million Powerball or Mega Millions' more than $1.1 billion drawings this week, check out these tips to help you cope with being a sudden millionaire. (Jan. 10, 2023)
Double check your tax cyber security plan — Computer incidents made today a bad day to fly in the United States and Canada, or try to send international mail in the United Kingdom. But those technology crashes are a good reminder to double check your personal and business cyber security plans. The IRS has some tips and guidance for tax professionals' data reliability and protection systems. (Jan. 11, 2023)
Tax documents you need to file your 2022 return — The focus of every tax filing season is Form 1040. But to fill out that form completely and accurately, you need other forms. Here's a look at the myriad forms and documents with specifics on last year's income and possibly deductible expenses that soon (by around Jan. 31 in most cases) should arrive in your email or snail mail boxes. (Jan. 11, 2023)
Time to track your business travel — Do you drive your car for business? Then you should have already started logging your 2023 work-related miles so you can deduct them. (Jan. 12, 2023)
Jan. 23 is the start of 2023 tax season; Free File opens Jan. 13 — The start of tax season 2023 is official. The Internal Revenue Service says it will start processing 2022 tax year returns on Monday, Jan. 23. You can file before then, but the agency won't do anything with your 1040 until then. You also can file using Free File (if your income last year was $73,000 or less) starting Friday, Jan. 13. (Jan. 12, 2023)
Free File 2023 is open for business — It's a lucky Friday the 13th for some taxpayers. Free File is now open. If your 2022 adjusted gross income is $73,000 or less, you should be able to find a no-cost tax software that fits your needs from the 9 versions available this filing season. (Jan. 13, 2023)
Don't miss Jan. 17 estimated tax payment deadline — Next Tuesday, Jan. 17, is the due date for the fourth and final estimated tax payment for 2022. That tax task tops the list of tax moves to make in January 2023 for most filers. However, some who live in areas that have been declared major disasters get a bit more time. Whatever your final 1040-ES due date is, don't miss it or you could end up owing penalties and interest. (Jan. 13, 2023)
Don't fall for tax myths — Taxes can be frightening, but don't make them worse than they are. On this first of 2023's two Friday the 13ths, don't fear, or fall for, these 13 scary, but wrong, tax myths. In fact, don't fall for them any day of the year. (Jan. 13, 2023)
An alternate way to pay estimated taxes — The IRS prefers to get estimated tax payments in four equal payments, one each April, June, September, and January. Tuesday, Jan. 17 (because of weekend/holiday conflicts), is the deadline for 2022's fourth and final 1040-ES payment. But even though it's more work, if your income fluctuates throughout the year, you may find it worthwhile to use the annualized income installment payment option. (Jan. 15, 2023)
Tax filing checklist questions to answer before you file — You've got all your tax statements, but don't file just yet. You also need to ask yourself some basic tax questions. Your answers could help you submit a 1040 that's as complete and correct as possible. They also could mean you don't overlook any tax breaks. (Jan. 18, 2023)
Why you should file your tax return early — Taxpayers expecting tax refunds typically file their annual returns as soon as they can. But there are some other reasons you might want to get to work on your Form 1040 sooner than later. Check out these 7 reasons to get to work on your 2022 return now. (Jan. 19, 2023)
Why you should wait to file your tax return — Procrastinating when it comes to filing taxes is not unusual. Every year, millions put off sending in their returns until Tax Day…or later. You'll get no judging here. Sometimes it is a good idea to take your time to finish your Form 1040. Here are 6 reasons to wait to file. (Jan. 20, 2023)
Who does, and doesn't, have to file a tax return — Do you have to file a federal tax return? Probably. But in some cases, the IRS doesn't demand a Form 1040. Here's a look at the factors that go into determining whether you must file a tax return. (Jan. 23, 2023)
Tips for first-time filers — Welcome to the tax paying club! The only initiation rite for this large society is filling out your first Form 1040. These tips for first-time taxpayers can make the process a little less intimidating. Even if you're a tax veteran, check them out; some of the advice applies to all us filers. (Jan. 24, 2023)
Why to file a tax return even if you don't have to — Nobody likes filing a tax return, so why should someone who isn't legally required to file go ahead and send in a 1040? Because it might mean a tax refund. Here are some situations where filing even if you don't have to can pay off. (Jan. 26, 2023)
Key 2023 federal tax deadlines — We made it through the first week of tax season 2023, but another deadline is looming. Jan. 31 is the filing, and tax payment, deadline for taxpayers who opted not to make their final 2022 estimated tax payment on Jan. 17. This tax calendar has that and other key individual tax due dates for the rest of this year. (Jan. 30, 2023)

*****

As I mentioned earlier on this inaugural 2023 tax tips page, as soon as January wraps and all this month's tips are listed here, I'll move on to the separate February through December pages.

You can, however, find links at the bottom of every monthly tax tips page that will take you to each page's collection of tax advice. That's them below.

Technically, all are live, meaning you can click now on the February through December links below. But since we're not there yet, instead of tax tips you'll be greeted by an animated fellow making good use of one of my favorite Texas sayings, Whoa up there, cowboy.

That idiomatic admonishment will be replaced by usable tax information as the year's months arrive.

January	July
February	August
March	September
April	October
May	November
June	December

Today's Tax Tip

Tax benefit of volunteering on 911 Day and beyond — On this Patriot Day 2024, volunteer efforts honor those who died or were injured during the terrorist attacks in New York City, Pennsylvania, and Washington, D.C., on Sept. 11, 2001. The value of the time you give to a nonprofit, on 911 Day or any time, is not tax deductible, but some associated expenses might be. (Sept. 11, 2024)
The 2024 Tax Tips offer ways to file your annual return, along with post-filing advice, important tax news and, of course, ways to cut your current tax year bill. You'll find the monthly assemblages on their own respective pages: January, February, March, April, May, June, July, August, September, October, November and December. Remember, tax tasks and tips don't stop after you file your annual return!

All About Kay

OK, some about Kay

Kay Bell — Native Texan
(the blog title totally makes sense now, right?). Professional journalist. Tax geek.
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Tick ... Tick ... Tick

Tax Season 2024 continues!

We made it. Tax Day 2024 is finally over. For most of us. An estimated 19 million taxpayers got an extension to file their 2023 tax year return. That's fine.
In fact, the Internal Revenue Service appreciates some of us spreading out our filings. It gives the agency time to process the surge of returns
that came in on April 15.

But enough about Uncle Sam's tax collector and its issues. The focus now is on all y'all who filed for extensions, giving you another six months to complete your return. Let's get started on meeting that new Oct. 15 deadline. It will be here before you know it.

The monthly tips and reminders a little further down this column can help you finish up your Form 1040. There also will be tax tidbits each month that make sure you meet other tax deadlines. And, of course, you'll find advice on ways to cut your still adding up 2024 tax bill.

Finally, keep an eye on the countdown clock below. It will help you track yet more days tick, tick, ticking off toward that absolutely final fall filing due date.
Note: I'm in the Central Time Zone, so adjust accordingly for where you live.

Time for Tax Tasks

🍁 Hello 🍁 September 🍁
🍂 Fall 🍂 is 🍂 here! 🍂

OK, fall’s not here yet, at least not here in Texas according to still quite-warm temperatures. But forecasters say cooler weather — like highs in the 80s; yes, everything, especially weather, is relative — is on its way, and that meteorological promise gives up hope.

via GIPHY

As we get ready for the promised bit of chill, September also is a great month to make some cool tax moves, like those listed below. So, grab a sweater (or not yet), and let's go!
Sept. 1: Today is Meteorological Fall, the three months from Sept. 1 through Nov. 30 when days get shorter and cooler, but not cold. It's also the start of the annual National Preparedness Month. This year’s theme is “Start a Conversation,” since it's important to talk with your loved ones about potential emergencies. It's also critical to be prepared, as the Atlantic and Gulf of Mexico hurricane season usually peaks in September.

We’ve already had three tropical systems do enough damage to prompt Federal Emergency Management Agency (FEMA) major disaster declarations. The 2024 tropical storm season’s second named storm, Hurricane Beryl, landed as “just” a category 1 on the Texas coast, but still took 38 souls and left Lone Star State residents facing an estimated $30 billion in damages.

Hurricane Debby made two U.S. landfalls, in the Big Bend area of Florida and then again in South Carolina before moving up the Eastern Seaboard, producing disaster declarations all the way up to Vermont. Tropical Storm Ernesto, followed, slamming the U.S. territories of Puerto Rico and the U.S. Virgin Islands, as well as spawning deadly rip tides along East Coast beaches as the storm moved toward Bermuda.

And, coinciding with Meteorological Fall, we’ve still got three months of the 2024 hurricane season to go!

That has coastal residents on edge, since Uncle Sam's official forecasters at the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center say we could get 17 to 25 total named storms, which are those with winds of 39 mph or higher. Of those, eight to 13 are forecast to become hurricanes, meaning winds of 74 mph or higher. Four to seven becoming major hurricanes; that’s category 3, 4 or 5, with winds of 111 mph or higher.

Regardless of the count, it only takes one to wreck your world. If you haven’t already, get ready for not just tropical systems, but whatever dangerous weather that’s common where you live. The countdown clock above can help you keep track of how many more days you have to worry about tracking any size or type of tropical storms. You also might want to check out the ol' blog's special Storm Warnings collection of special pages with posts offer tax advice on preparing for, recovering from, and helping those who sustain damages from the many ways that that weather goes wild.

Sept. 2: Happy Labor Day! This annual celebration of workers' contributions is a federal holiday and day off for many.

When you get back to work after this three day holiday, take a few minutes to check the federal tax amount that’s coming out of your paychecks. If you need to adjust your withholding so that you have the most accurate amount of taxes withheld, now is the time to do that. Submitting a new W-4 early this month will mean any changes are spread over the last four months of the year, making any impact less noticeable.

Sept. 3: If you live in Auglaize, Crawford, Darke, Delaware, Hancock, Licking, Logan, Mercer, Miami, Richland, or Union counties in Ohio, today is your Tax Day. The Internal Revenue Service granted individual and businesses in those counties tax relief since they were declared major disaster areas following a tornado outbreak in March.

Sept. 10: Do you work as a server at a restaurant or at any other establishment where gratuities from customers are part of your compensation? I hope you get all the tips you deserve for doing your job well. Remember, though, that those tips are taxable income.

Whether you're dining at your favorite eatery or getting food delivered to your home, if a tip isn't included on your restaurant or delivery bill, click the image above to calculate how much to tip the person who brought it to you.

And if you got at least $20 in gratuities in August for your extraordinary services as a food server or hair stylist or parking valet or whatever job where tipping is common, you must report that amount by today. Use Form 4070 to let your employer know the total tips you took in last month.

Sept. 16: Today is the deadline to pay your third installment of estimated taxes. This tax is due on income that’s not subject to withholding, such as investment earnings or contract work. Most estimated tax filers make the payments four times a year. The September payment is for such earnings received in June, July, and August. It’s usually on the 15th, but since that was Sunday, the deadline is pushed to the next business day — today!

Sept. 23: Sept. 22: The Autumnal Equinox arrives today at 8:44 a.m. Eastern Daylight Time in the Northern Hemisphere, marking the first day of Fall for all us who don't follow the meteorological fall calendar. Adjust for your time zone, since the equinox occurs at the same moment worldwide. It's also a go-to day to think about home maintenance that will help you weather the coming colder weather. The Inflation Relief Act includes extension of older and addition of new energy-related tax breaks, including some for residential energy improvements.

Sept. 30: Wow! Where did September go? That’s a good question to ask if you got an extension to file your 2023 tax return earlier this year. The last day of this ninth month means that your absolutely final Oct. 15 due day is another month closer. So you might want to get to work on that Form 1040 now. The easiest way to do do is to use tax software and electronically file.

If your adjusted gross income is $79,000 or less, you should check into Free File, the no-cost online tax preparation and electronic filing program offered by the IRS and its Free File Alliance partners. It’s open through the Oct. 15 extension deadline. This year, eight tax software companies offer programs to qualifying taxpayers.

Note that the Free File $79,000 or less income threshold applies to all filing statuses. If your income is too high, you still can file for free by using Free File's Free Forms option.

Small Business Tax Calendar: Important filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS' online calendar page and view the full year's important business and individual tax dates in IRS Pub. 509.

State Tax Help

Don't forget your state taxes!
Forty-three states and D.C. collect personal income taxes. But even if you live in of the seven states without an income levy, you still face other state (and local) taxes.

State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.

Tax Forms

Thanks to our increased use of tax preparers and computer software, many of us don't see our tax forms until we sign and file them. But knowing what's on these documents, either in paper or digital form, and why the IRS wants it is key to understanding our tax system. And knowledge definitely is power, especially when it comes to tax savings. Find this valuable information in the ol' blog's special Tax Forms 2024 page.

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A collection of Kay Bell stories
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Tax Reading Room
You also might enjoy these other tax tips from some of my tax-writing colleagues:
J.K. Lasser 2024 Taxes
Taxes for Dummies 2024
Tax Savvy for Small Business

~~~~~~~
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I gotta tell ya ...

AKA Disclaimer:

I am a professional journalist who has been covering tax issues since 1999. I am not a professional tax preparer.

The content on Don't Mess With Taxes is my personal interpretation and opinion based on my study and understanding of tax laws, policies, and regulations. It is provided for your private, noncommercial, educational, and informational purposes only. While I work to ensure each post's accuracy, the items are not recommendations of any specific tax action(s) you should or should not take. Similarly, mentions of commercial tax products or services are not endorsements.

In other words, my ramblings on the ol' tax blog are free advice, and you know what they say about getting what you pay for. That's why when it is time for you to file your own taxes, I urge you to get additional, professional, paid-for guidance from an accountant, Enrolled Agent, or other reputable, qualified tax preparer who is familiar with your individual tax circumstances.

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COVID-19 & Taxes

Coronavirus has wreaked havoc
on the 2020 and 2021 tax seasons.
These five Coronavirus (COVID-19) and Taxes pages have details:
March-July 2020
August-December 2020
January-December 2021
January-December 2022
…and so it continues into 2023
…and, alas, into 2024
You can find medical coronavirus resource links in the next section.

COVID-19 Resources

Need help finding a coronavirus vaccine in the United States?
Call 1-800-232-0233
or TTY 1-888-720-7489.
More information and resources at:
CDC Vaccines
CDC Booster Shots
HHS Combat COVID
USA.Gov COVID Info

September 2024

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Photo by Kay Bell
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Tell it to the Hill

While it's easy to rail at the IRS, for the most part we can thank — or blame — Congress and the White House for our tax laws. So if you have an issue with tax legislation or want a tax bill passed, you need to let your federal legislators and the White House occupant know of your concerns. You can find out who in Washington, D.C., to contact (and how), as well as get information on your local lawmakers for matters, tax or otherwise, closer to home, at USA Gov.

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