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.