Savvy taxpayers view their income taxes as a year-round experience instead of a single event. Workers are preparing now to ensure they're ready for the 2023 tax season.
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Here are the steps you can take now to ensure ease in filing your taxes.
Store Your Tax Return in a Safe Place
One of the most commonly cited tips to make tax filing easier is to get organized. This begins with your tax return. Place your tax return and tax documents in a safe place like a desk drawer where you'll be able to organize them throughout the year.
Mark Steber, chief tax information officer at Jackson Hewitt, said there's no overly complex organization system needed. Sometimes the shoebox or big brown envelope organization file works best.
Separate any documents you receive that might have tax implications into at least four different categories including income items, deductions, life changes and other. Organize documents into each file accordingly.
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Keep Track of Expenses for Deductions
As you organize any tax implication documents, it's a good idea to start keeping track of business expenses you plan to deduct now.
Armine Alajian, CPA and founder of Alajian Group, said this not only saves you time, but potentially results in a larger refund. Use an organization system that works best for you and when it comes time to claim deductions on your tax return, these expenses will be easy to access.
Pay Attention to Tax Law Changes
2022 was a vastly different tax year than the last few years. Steber said this year there could be refund shock -- or refund whiplash versus last year -- when it comes time to file income taxes.
"At this time, 2022 has reverted back to the standard child tax credit amount and allocation -- meaning there won't be monthly payments or a larger credit amount -- as well as no above-the-line charitable donation deductions, and unemployment income is fully taxable," said Steber.
Another big tax law change impacts those that use third-party apps, like Venmo and PayPal. Steber said they will now get Form 1099-K from a company if they received more than $600 on their platform. The IRS will also be given this information from the companies.
Ensure Accurate Tax Withholdings
Steber recommends confirming that you are withholding the correct amount from your paychecks.
"This can make a major difference on your tax return because if you withhold too little, you could risk owing the IRS come Tax Day or getting a smaller refund than you expect," said Steber.