Your 2023 Tax Preparation Starts Now

It won’t be long before we all start hearing those two dreaded words again. Tax season.

The stress is real every year, but you can make your 2023 filing a lot easier and manageable by starting to prepare today. The filing deadline for most is April 15, 2023, so avoid any last-minute hiccups or headaches by making these early arrangements before the end of the calendar year.

Update Your Name, Address, and Filing Status

If you’ve recently moved, changed your name, or have gotten married or divorced, make sure the IRS and Social Security Administration (SSA) have your correct address and personal information on file. Reach out to your local Social Security office or contact the IRS directly to verify that everything is up to date.

According to the IRS, if the name on your tax return doesn’t match SSA records, the processing of your return could be delayed. However, you can wait until filing to list your new address, but you will miss out on any news or communications mailed by the IRS until they've been made aware of your new place of residence.

And speaking of getting married, remember that the IRS has five significant filing statuses or categories that every taxpayer falls into. They are as follows:

• Single

• Head of Household

• Married Filing Jointly

• Married Filing Separately

• Widow/Widower with Dependent Child

Your status may be different than last year, so keep that in mind when filing in 2023. Check out the IRS’ website for more information on each filing status.

Documents and Deductions

In addition to all the tax forms that may be applicable to your situation, it’s not a bad idea to collect all the documents you may need to back up your deductions before the end of the year. Gather documented deductions like donations to charities, business expenses if you’re self-employed, IRA contributions, and all other records of your income. That way, you won’t be scrambling to find that one receipt or pay stub you got all the way back in January.

Expert Tip

Have Form 1098 ready to report the amount of interest and related expenses you paid on mortgage if the amount totals $600 or more.

Withholdings

You probably filled out a W-4 on your first day at your current job. The W-4 tells your company how much money to withhold from your paycheck for federal income tax, determined by your filing status.

When too much is withheld, you’re sending the IRS more money than you need to, and paying too little could land you a hefty tax bill or penalty for underpayment. So, fill out a new W-4 and submit it to your employer when you make a major personal life change, such as getting married or increasing your number of dependents. The goal is to get your tax bill or refund as close to zero as possible so you always have the right amount of money in your pocket.

Do You Need a Tax Expert?

To file alone or to not file alone, that is the question. Seeking out the expertise of a tax preparer will help you prepare, calculate, and file income tax returns with the guidance of someone with an abundant understanding of current tax laws. But is hiring someone to help you with your taxes necessary?

Of course, the answer is – it depends. The more intricate and complex your tax situation, the more helpful and reliable having an expert by your side will be. Especially if you’re a business owner and must file for both your personal and business returns. An accountant would certainly ease the load.

You be the judge on if you need the services of a licensed tax professional in 2023 (and if it can fit into your budget).

You’re On the Right Track

Filing taxes isn’t always easy, but with the tips above, we hope you’ll get through this upcoming season stress-free. And remember, don’t be afraid to ask questions! We at Atlantic Bay are not licensed tax professionals, but we can provide guidance on Form 1040-X and mortgage interest. We are always here to help!