This year’s tax return deadline is April 18, 2023. With only about two weeks left to complete and send in your 2022 return, it’s best to start thinking about filing an extension in order to give you more time to gather your documents. Just know that any tax liability is payable at the time that you file the extension.
There’s no time like the present to begin to prepare for next year’s filing. There are steps to take to make the process smoothly. Here are some tips that can help.
Know Your Filing Status
Once you have determined your filing status, you can put all the necessary tax forms together. Gather your financial information, including transactions for the tax year, such as checks, bank statements, W-2 forms, and any sources of income you received.
The IRS has five main filing categories that taxpayers fall under. These are:
- Head of household
- Married filing jointly
- Married filing separately
- Qualifying widow/widower with a dependent child
Expenses and investment information for the year can add up and should be documented: child care and education costs, mortgage payments, charitable donations and more. If you made any estimated tax payments during the year, have this information handy as well.
Depending on your filing status, you may have different tax requirements from other taxpayers, and you could also qualify for certain deductions and credits. Let us know if you are unsure of the documents you will need. If you need clarification, contact us so that we may assist you.
Have Personal Information Ready
You will need the social security numbers and birthdays for you, your spouse and each of your children.
Gather receipts and other documents
The receipts you will need to provide while prepping for tax filing depend on whether or not you itemize your deductions or claim the standard deduction. You will want to choose whichever offers the bigger write-off. The only way to know for sure is to add up your itemized deductions and compare the result to your standard deduction. When possible, have last year’s return handy to help you know which items to include in the current year. If you cannot find a copy of your tax return from last year, contact the CPA you worked with previously.
Max Out IRA Contributions
As part of your tax-planning strategy, you can contribute to an IRA to reduce your taxable income. You can contribute up to $6000 to an IRA account prior to the April 2023 filing deadline. For next year, the maximum allowable contribution for the 2023 tax year increases to $6500.
Choose the Right Tax Preparer
Gather documents, know your filing status, and prepare your return on time and correctly to avoid penalties and fees. For added peace of mind, consider making an appointment with us as soon as possible so that we can guide you through the process.
What to Know About Filing an Extension
If you are still missing certain key documents and information that you need, or there are other circumstances to keep you from filing by the deadline such as illness or travel, you can file an extension by using Form 4868 – Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This must be filed on or before the April 18, 2023 tax deadline.
By filing an extension on your taxes, you will have six more months to file your personal return. Note, however, this will delay any refund to which you are entitled. Also, know that filing for an extension does not delay your tax payment. In order to avoid fines and penalties and to be on good terms with the IRS, you must pay all or part of your estimated taxes by the April 18th deadline.
Tackle This Year’s Tax Season With Our El Paso/Las Cruces CPAs
Between gathering documents, knowing your filing status, and finding the right professional, tax season always requires plenty of time, preparation and effort. But the process doesn’t have to be arduous when you take the right steps. Consider working with our accounting firm. Contact us online or call (915) 775-1040 today.