Preparing for Tax Season
The holidays have passed, the calendar has turned to a new year full of resolutions. January is Financial Wellness Month for those of you that resolve to get your finances in order. One way to get a jump start on this initiative is to get your tax documents together to file later this month when the IRS opens electronic filing. At the time of this writing, our team of CPAs is currently working hand in hand with our clients to meet their initial deadline on January 31, 2023, for their information return filings such as 1099s and W-2s.
While these information return filings may not apply to you, I want to share some frequently asked questions we receive and provide guidance to answer them.
Why should I file my tax return as early as possible?
Filing early has many advantages. For starters, filing as early as possible helps to mitigate some of the exposure to possible identify theft. Cyber criminals are notorious for attempting to front run filing incomplete, fraudulent returns in their victims’ names in order to re-route the victim’s tax refund into the criminal’s bank account. Further, those who file their return early will likely get their refund sooner, or if they owe tax, will have more time to ensure funds are in place to pay by the April 18, 2023, deadline. April 15th is on a weekend and April 17th is Emancipation Day in Washington, DC.
What is the easiest way to determine what documents I need?
A good general rule of thumb to start is to examine your tax return from the previous year. For clients of our firm, we send them a document known as an organizer which illustrates the names and amounts of the documents they previously had to guide them through organizing current year documents. For those who may prepare their own return, find your 2021 tax return and walk through it to compile a list of documents you may need.
When can I file my return?
As of this writing, an official filing date has not been announced. If history is any guide, the week of January 23, 2023, will likely be the opening of the IRS beginning to accept tax returns.
Should I file my own return or hire an accountant?
Generally, you should seek the assistance of an accountant if you had a major life event or milestone such as marriage, divorce, child birth, new homeownership or an inheritance. Also, those with small businesses are likely to benefit from the services of a Certified Public Accountant to help navigate the business filings related to businesses. This is true even for those who may work in the gig economy or have a side business in addition to their day job.
I often tell clients and prospective clients the more organized you can become, the easier your tax return filings will be. This is especially true for our clients who we recommend at least one mid-year tax projection as well to ensure we are on track and no surprises await in April. Hopefully, these tips will get you started to a smooth and uneventful tax season.
Published in the Victoria Advocate
Kyle W. Noack CPA/CFP® is Chief Executive Officer of Keller & Associates CPAs, PLLC and KMH Wealth Management, LLC.