Taxpayers, start your engines! The tax season officially opened January 29, and the IRS expects more than 128 million individual tax returns to be filed. To mark the event, here are some important facts:
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Tax filing deadline
For most taxpayers, the deadline to file their personal federal tax return, pay any tax owed or request an extension to file is Monday, April 15, 2024.
Taxpayers living in Maine or Massachusetts have until April 17, due to the Patriot’s Day and Emancipation Day holidays. Taxpayers who reside in a federally declared disaster area, also may have additional time to file.
Prepare now
Bookmark the IRS.gov website and check out the “Get Ready” section. You will need to gather all of your relevant information, like Social Security numbers and this year’s Identity Protection Personal Identification Numbers (IP PIN).
Collect all income related documents, like W2s, 1099s, unemployment benefits received, dividends, pensions, annuities, or retirement plan distributions.
Use IRS Free File
This service lets you file your federal taxes at no extra cost either through electronic fillable forms or through IRS partnerships with private tax preparation services.
It’s open to taxpayers with Adjusted Gross Income (AGI) of $79,000 or less in 2023. If your AGI is above $79,000, you can use Free File Fillable Forms, the electronic version of paper forms.
Consider Direct File
The IRS is experimenting with a new way to file taxes called Direct File, which will allow taxpayers to file their 2023 federal tax return online, for free, directly with the IRS.
If you are eligible (you have to live in one of the 12 pilot states – California is one), it sounds pretty nifty: no software, mobile-friendly, easy to use, secure, accessible, and free.
Skip the paper, file electronically
Many of the headaches that taxpayers encounter, including easily avoidable errors and long wait times for refunds, could be sidestepped if everyone filed electronically and used direct deposit.
If you are due a refund, electronic filers with direct deposit usually receive it within 21 days.
Decide whether to engage a pro or go it on your own
It’s tough to find someone to help with your taxes in April, so now’s the time to figure out whether or not it is necessary. If you have a complicated financial life, consider paying up for a professional.
For example, small business owners and those who are self-employed may want someone who is familiar with Schedule C and who will let you know when you should file a Form 1099 to report any payments you made to others.
If you had a lot of investment activity, sold property, or have to file an estate tax return for a deceased family member, you may also want guidance. Check out the IRS website for tips on how to choose a tax professional.
Claiming the Child Tax credit (CTC)?
Don’t jump the gun! If you have a child under the age of 17, you may be eligible to claim a tax credit of up to $2,000 per child when you file your tax returns.
The credit is available to single and head of household filers who earn less than $200,000 and married filing jointly who earn $400,000 or below.
There is a proposal in Congress that could help lower income families by increasing their CTC, but it’s not clear whether the change will get through and if it does, whether it will be in time for this tax season.
Regardless of what happens with the proposal, by law, the IRS can’t release a refund for a return for certain credits until mid-February. (You can use the IRS Where’s My Refund? tool to track your refund.)
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Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected]. Check her website at www.jillonmoney.com.
