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The 2022 tax season is rapidly approaching. It is important to keep in mind that various tax changes made last year may not be in place for the 2022 tax season.
With inflation rates sky high, you may have concerns as to how your tax return is going to be affected. Here are some of the top tax tips for 2023 so you can get the most out of your tax refund in the coming tax season.
Organize Tax Records Early
The 2022 tax season is coming quickly, and getting organized now can save you a lot of hassle in the coming months. It is important to organize your 1099s, last year’s tax return, any W-2s, receipts that need to be included in your return, and more. You might also want to include your mortgage interest statements, rent, and other information that may be considered a deduction as you prepare your tax return.
You can go a step further and group similar documents together, which can make it easier for you and your account to. Never assume that any type of income is tax-free. This includes municipal bonds, income from rental properties, and the amount you may have generated in stock returns.
Make Any Estimated Tax Payments
Do yourself a favor and take steps to make a last minute estimated tax payment. If you haven’t paid enough to the IRS over the last year, you may be penalized and owe interest as well.
Those who make estimated last minute tax payments by January 15 can avoid a fourth quarter underpayment penalty. However, if you failed to send tax payments before then, you can expect a penalty for each of the quarters prior.
However, if you only begin generating income after August 31, 2022, you can prepare Form 2210: Underpayment of Estimated Tax and annualize your estimated tax liability, which could reduce or prevent underpayment penalties.
Itemize Your Tax Deductions
We know it’s easier to take a standard deduction, but when you itemize your tax deductions, particularly if you work in a home office, itemizing your deductions may be worth it.
The 2022 standard deduction is only $25,900 for married couples filing jointly. If your itemized deductions exceed this, it may be wise to do so so you can maximize your potential refund.
Make Sure You File On Time
Make sure your 2022 taxes are filed before the deadline. If you cannot get your tax return filed by April 18, 2023, make sure to fill out Form 4868 which will give you an extension. You may have until October 16, 2023 to finalize your taxes with this form.
Note that the extension is of the time to file, not the time to pay, so make sure you timely pay your taxes by April 18, 2023.
If you file your taxes late and pay beyond the deadline, you could be hit with a penalty amounting to approximately 5% of the tax owed per month, with a late payment penalty of 0.5% each month that you are late. You can expect a maximum late filing penalty of up to 25%. However, by filing Form 4868, you do not need to worry about this late filing penalty.
Conclusion
If you have additional questions about how you can ensure your taxes are in order, do not hesitate to contact our experienced tax attorneys at Weisberg Kainen Mark, P.L. Schedule your confidential case evaluation as soon as today by completing our online contact form or calling our office at (305) 374-5544.
Weisberg Kainen Mark, PL
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