Navigating the tax system can be complex and stressful. Here’s what you need to know, including how to avoid some of the most common tax filing mistakes.
WASHINGTON. For many people filing US tax returns, especially first-timers, this can be a daunting task that is often left to the last minute. But if you want to avoid the stress of an approaching deadline, start organizing as soon as possible.
Whether you pay your taxes yourself, go to a tax clinic, or hire a professional, navigating the tax system can be tricky and stressful. Courtney Alev, financial advocate for Credit Karma, advises you to be careful with yourself.
“Inhale. Set aside some time, set aside an hour, or complete it over the weekend. I hope you will see that it is much easier than you think,” Alev said.
If you find this process too confusing, there are plenty of free resources to help you through it.
Here are some things you need to know:
WHEN IS THE TAX DEADLINE?
Taxpayers have until April 18 to submit their declarations for 2022.
WHAT DO YOU NEED TO FILE A TAX RETURN?
While the required documents may depend on your individual case, here is a general list of what everyone needs:
-Social Security number
– Forms W-2 if you are employed
—1099-G if you are unemployed
—Forms 1099 if you are self-employed
— Savings and investment records
– Any eligible deductions such as education expenses, medical bills, charitable donations, etc.
– Tax credits such as the Child Tax Credit, Retirement Savings Credit, etc.
For a more detailed list of documents, visit the IRS website.
Tom O’Saben, director of taxation and government relations for the National Association of Tax Professionals, recommends getting all of your paperwork in one place before you start filing your tax return, and having last year’s paperwork if your financial situation is on the wane. has changed. .
Teresa Grover, website coordinator for the Voluntary Income Tax Assistance (VITA) program at Northeast Wisconsin Technical College, also recommends that taxpayers create an IRS Identity Protection PIN to protect against identity theft. Once you create a number, the IRS will require it to file your tax return.
HOW DO I FILL THE TAXES?
You can file your tax return online or on paper. However, there is a big time difference between the two options. A paper filing can take up to six months to be processed by the IRS, while an electronic filing cuts it down to three weeks.
WHAT RESOURCES ARE THERE?
For those making $73,000 or less a year, the IRS offers free tax preparation that does the math for you. If you have questions while working with tax forms, the IRS also offers an interactive tax assistant tool that can provide answers based on your information.
In addition to popular companies such as TurboTax and H&R Block, taxpayers can also hire licensed professionals such as certified public accountants. The IRS offers a directory of tax professionals for the United States.
The IRS also funds two types of programs that offer free tax assistance: VITA and the Seniors Tax Counseling (TCE) program. People who earn less than $60,000 a year, have a disability, or speak limited English are eligible for the VITA program. Those who are 60 years of age or older are eligible for the TCE program. The IRS has a website to search for organizations hosting VITA and TCE clinics.
If you have tax problems, there are clinics all over the country that can help you solve these problems. Typically, these tax clinics also offer services in other languages such as Spanish, Chinese, and Vietnamese.
HOW CAN I AVOID ERRORS IN THE TAX RETURN?
Many people fear getting into trouble with the IRS if they make a mistake. Here’s how to avoid some of the more common ones:
- Double check your name on your Social Security card.
When working with clients, O’Saben always asks them to bring their social security card to double-check their number and legal name, which can change when people get married.
“You may have changed your name, but you haven’t changed it on Social Security,” O’Saben said. “If the social security number does not match the first four letters of the last name, the declaration will be rejected and this will delay processing.”
- Look for tax returns if you’ve opted out of paper mail.
Many people like to opt out of regular mail, but when you do, it can also include your tax documents.
“Just because you didn’t get anything in the mail doesn’t mean there isn’t any information document that you need to know about and report,” O’Saben said.
- Make sure you report all of your income.
If you had more than one job in 2022, you need W-2 forms for each one, not just the job you finished the year at, says Christina Wise, acting director of the Michigan State University Tax Clinic.
Also, if you have a business that uses PayPal or Venmo as a service, this must be shown on your tax return. In 2022, use of these services must be reported if they amount to 200 transactions in a calendar year and sales of goods or services exceed $20,000.
WHAT IF I MAKE A MISTAKE?
Mistakes happen and the IRS takes a different approach depending on each case. In general, if you make a mistake or miss something on your tax returns, the IRS will review you, Alev said. An audit means that the IRS will ask you for additional documentation.
“They are generally very understanding and willing to work with people. You will not be arrested if you type in the wrong field,” Alev said.
WHAT IF I HAVEN’T APPLIED FOR YEARS?
Wiz explains that you can file your tax return late, and if you should have received a refund, you can still get it. If you haven’t filed in years and owe money to the IRS, you could be fined, but the agency can work with you to manage payment plans.
HOW CAN I AVOID FRAUD?
According to the IRS, tax season is the best time for tax scams. These fraudulent activities can take place over the phone, text messages, email, and social media. The IRS does not use any of these means to communicate with taxpayers.
Sometimes even tax authorities control scammers, so it is important to ask a lot of questions. If the IRS says you’ll get a refund in excess of what you’ve received in previous years, for example, that could be a wake-up call, O’Saben said.
If you can’t see what your IRS is working on, get a copy of your tax return and ask questions about each entry.
HOW LONG SHOULD I KEEP COPIES OF THE TAX RETURN?
It’s always a good practice to keep a record of your tax returns in case the IRS checks on you for something you reported years ago. Both Wise and O’Saben recommend keeping copies of tax returns for up to seven years.