Check You Need to File
Before you start to worry about filing your taxes, it’s a good idea to confirm that you need to submit a return. Determining whether you need to file will depend on factors such as your age, marital status, and earnings.
You may not need to file a return for 2023 if all of the following apply:
You are single
You do not have any dependent children (see more about dependent children in section nine)
You do not have any taxable income such as trust accounts or inheritance
You are under the age of 65.
It’s unlikely you will need to file a return if you earned less than $12,950 during this period, which is the standard deduction for 2022. A standard deduction is the amount that you can earn during the tax year before paying income tax.
You can check whether you need to file a tax return on the IRS website.
Bear in mind, there may be advantages to filing even if you aren’t legally required to do so. For example, you may qualify for certain deductions. See section nine for more information on deductions.
Submitting your return by the deadline—or ideally well before—is often the best way to ensure the process runs smoothly.
For most taxpayers, the deadline to file their 2022 return is 18 April. For those who would prefer to avoid the anxiety of filing close to the deadline, the IRS will begin accepting returns from 24 January.
If you request an extension, you’ll have until 16 October to file. To receive an extension, you’ll need to complete Form 4868. Be aware that receiving a filing extension doesn’t mean that you’ll have longer to pay your bill.
Members of the military automatically receive an extension if they are stationed in a combat area on the deadline. In this case, you’ll have at least 180 days after you leave to file and pay.
By preparing as early as possible, you give yourself plenty of time to find the information you need or resolve any problems you may have.
Do Your Research
For many people, getting to grips with complicated tax jargon is one of the biggest challenges when it comes to filing a return.
Luckily, doing a little research could help you feel much more confident. Plenty of online resources and glossaries such as this example from Turbotax provide clear and simple explanations of tax terms.
Likewise, the IRS website contains a useful selection of tools and online resources that can help you understand the tax-filing process.
Once you fully understand the tax system, you should find it much simpler and easier to fill in your return.
If you are still uncertain, consider seeking help from a tax professional. See point seven for more information on professional tax filers.
Collect Relevant Documents
Gathering the details you need is one of the most important stages when filing your return.
Without the correct information, you risk submitting an inaccurate return. This could lead to penalties or an audit from the IRS.
Some of the key information you’ll need includes:
Your Social Security number
Your charitable deductions
Unreimbursed medical bills
Your federal and state returns for the previous year
Details of the property
Receipts for charitable donations and medical expenses.
You can download copies of relevant forms from the IRS website.
Consider Your Dependents
In addition to your personal information, you’ll need to gather information for your dependents before you can complete your return. These are children or family members who rely on you for financial support.
To qualify as a dependent, a child will normally need to meet one or more of the following criteria:
Be 18 years of age or younger at the end of the tax year
Be 23 years of age or younger and a student at the end of the tax year
Be identified as having a permanent disability
Not provide more than half of their own financial support
Be a US citizen, US national, US resident alien, resident of Canada or Mexico
Under the residency test, the child will need to have lived with you for more than half of the tax year. However, there are certain exceptions such as the child being in hospital.
Note: These rules also apply to qualifying relatives, such as step or adopted children.
Use Tax Filing Software
When you’re completing your return, you can choose between filing online or through the mail.
If your tax status is relatively straightforward, filing online with the help of tax software may be the simplest way to complete your taxes.
This technology allows you to file your return with electronic support. Common features include the ability to identify relevant deductions and import tax documents. Most software providers will also allow you to access support from tax experts if you have any difficulties when filing.
Online filing can also help avoid some of the potential problems of filing via mail. In addition to the risk of losing documents in the post, filing paper documents often takes far longer than submitting digital returns.
In fact, the IRS states that it can take more than six months to receive a refund when you file a paper return. In contrast, you’ll normally receive your refund within 21 days if you file electronically.
Create an Online Account With the IRS
If you’re planning to file online, it’s a good idea to create your account with the IRS well in advance of the deadline.
You can use an online account to:
Check your balances
Make a payment
View your payment history for the past five years
Create payment plans
Access your tax record
Sign power of attorney requests for tax professionals.
If you don’t have an ID.me or IRS username, you’ll need a photo ID when you create your account.
If you already have an account, it may be a good idea to log in before you need to file. This way, you can check that your account is working correctly.
Get Professional Advice—if You Need it
If you have complicated tax affairs, having a tax expert prepare your return may be a sensible solution.
Hiring a professional should help ensure you remain compliant with all relevant legislation. Likewise, a tax preparer can identify any potential deductions that you may be able to claim.
Working with a tax preparer could be worthwhile if you:
Run your own business
Have recently sold a business
Have more than one job
Have taxable assets such as insurance payouts or trust accounts
Have inherited money during the tax year
Have divorced or married within the tax year.
Understand New Rules on Deductions
Claiming all the deductions that you’re entitled to can significantly reduce the amount of tax you owe. However, it’s important to be aware that there have been several important changes to the rules surrounding deductions for the 2022 tax period.
Many of these changes are due to the ending of the American Rescue Plan. This provided emergency financial relief to lessen the impact of Covid-19.
For example, the Earned Income Tax Credit (EITC) is now between $560 and $6,935 depending on your circumstances. The EIRC is a refundable tax credit paid to low- and middle-earners. During the previous tax year, this figure was between $1,520-$6,728.
Likewise, the maximum amount you can claim in child tax credits for 2022 is $2,000 per eligible child, which is a return to its pre-Covid-19 levels. During 2021, this figure had been $3,600 per eligible child under the age of six and $3,000 for children between the ages of six and 17.
You can find a list of credit and directions on the IRS website.
Know Your Rights
As a taxpayer, you have certain rights when dealing with the IRS, which are set out in the Taxpayer Bill of Rights (TABOR).
The key principles under the bill are
The right to be informed
The right to quality service
The right to pay no more than the correct amount of tax
The right to challenge the IRS’s position and be heard
The right to appeal an IRS decision in an independent forum
The right to finality
The right to privacy
The right to confidentiality
The right to retain representation
The right to a fair and just tax system.
If you encounter any issues when filing your return, it’s useful if you can justify the reason you believe you’ve been treated unfairly.
You can learn more about these individual rights under TABOR on the Taxpayer Advocate Service.
When it comes to filing your taxes with the least possible hassle, starting early and doing your research are often key to success. If you still haven’t started your return, now is the time to begin collating your documentation and finding the answers to any questions you have.