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Friday, February 3, 2023

Preparing For The Income Tax Return 2022: Getting A Jump Start On Next Year’s Taxes

Close to 90 million taxpayers seeking professional help to complete and submit their tax returns in 2022, based on IRS figures. If you are one of them, you must get your forms, receipts, and other vital documents in order before tax day finally arrives. The IRS has urged income tax filers to take the simple steps necessary to file their tax return for 2022.

All it would take is preparing beforehand, an awareness of the changes in tax law, and access to convenient online tools. Armed with these, taxpayers can confidently prepare for their tax return in 2022. Filers can also access helpful information on preparing their tax records through online resources and tools.

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You would be asked to give direct information to your tax preparer or asked to complete a questionnaire. Both ways will immensely help you if you are prepared in advance with your documents and information for your tax return 2022. This will help you get through the process quickly and easily. And it will help you get organized better, ultimately saving you a lot of money.

Some key takeaways from the tax return 2022 would be to gather all the annual tax documents that you have received and have records of your deductible expenses and taxable income. A majority of such documents arrive by the end of January.

You would also need to collect all your payment receipts and segregate them by category if you itemize your deductions for income tax purposes. If you opt for the standard deduction, you would not need to bother with such receipts.

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You would need to keep a copy of your 2021 income tax filing for reference. Your tax software or the IRS will provide you with all the tax forms you might need for your tax return 2022.

Getting The Records Right For Tax Return 2022

The first step that you would need to ensure is getting all your tax documents organized. They should be gathered in the correct groups and sequences to file an accurate tax return. Otherwise, it could lead to processing errors and refund delays, or even fines and penalties.

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By this month, taxpayers should ensure that they have given the correct information about their bank, employer, and other debtors and creditors. They should give their present mailing address and the correct email address to ensure that they receive their year-end tax and financial statements.

Normally the year-end forms will come in by either mail or can be accessed online by logging into your account after the middle of January. You should as a filer also thoroughly review each of the income statements for their accuracy. You should contact the user to correct information that should be updated.

Choosing The Right Tax Preparer For Your Tax Return 2022

One of the most important tasks you have in hand is getting the right tax preparer. And if you do not have one, a good way is to find someone through your friends and acquaintances. You could also approach your advisers such as your lawyer to help you out with referrals.

But you need to be sure that the person you select for your tax return 2022 has a preparer tax identification number (PTIN) that shows that the person has the authority to prepare federal tax returns.

Also, ensure that you clear up your charges beforehand. The charges will of course depend on the complexity of your income tax returns and the volume of work that the tax professional will have to do. Stay away from firms that take a percentage of your income tax refunds.

You can rely on the IRS website for tips to help choose a tax preparer and also get a link to the preparers’ directory on the IRS website. You can get details of the location and credentials.

One important matter that taxpayers need to look out for in case they have been hit by a disaster is the filing date. In 2022, victims of Hurricane Ian in Florida and victims of wildfires in Colorado were granted an extension to file their income tax returns. You would need to consult your tax consultant or keep a watch for disaster relief announcements to determine whether you are eligible for any support or extension in income tax filing date.

Schedule Your Appointment Early

Your filing becomes easier the earlier you schedule an appointment with your preparer. You can complete your return earlier and there is less chance of errors creeping into your tax file. There are always things that you might miss out on if you go in for the last date of filing your tax return for 2022.

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If you have a refund, you will get it earlier if your filing is on time. Delaying scheduling your appointment with your tax preparer could drag you toward the filing deadline and leave you vulnerable to errors creeping into your filing.

Further, waiting too long for an appointment with your tax preparer could lead to you not getting a scheduled appointment before the income tax filing deadline. This could lead to missing out on any chance of lowering your tax bills, including any deductible contribution to a Health Savings Account (HSA), or individual retirement account (IRA).

Collect All The Documents Relevant To Tax Return For 2022

Collect beforehand all the tax documents that are relevant for your tax return 2022 from your employer as well as your bank, brokerage firm, and all other associates with whom you do business. Ensure by January that all the information matches your records on every form.

Some common forms are W-2 if you had a job. There are the 1099 forms that give details of other income received, including the 1099-DIV for dividends, 1099-INT for interest, and 1099-MISC for non-employee compensation that is paid to independent contractors.

It is also Form-1098 for paid mortgage interest and Forms W-2G for gambling earnings. Gains and losses through security transactions are made through Form 1099-B, but they are not required to be mailed by brokers until the middle of February, so you can think about them later if they concern your filings.

Rounding up your receipts is important, and you need to decide whether you want to go for a standard deduction or itemize your deductions.

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