Many business owners and individual taxpayers find tax filing challenging. They make costly mistakes in a frenzy to meet the tax filing deadline. However, tax filing does not have to be complicated. With a bit of preparation and convenient online tax filing tools, taxpayers can confidently face the challenges that the tax filing season throws at them.
Here are some simple steps to take for hassle-free tax filing.
Gather Tax Records
Inaccurate tax filing can lead to processing or refund delays. If the IRS notices a glaring mistake in your return, they may send you a notice or letter. When you have all your tax filing documents gathered and organized, you are in the best position to file your returns accurately.
Consider financial transactions in 2022, and determine if they are taxable and how they should be reported. The IRS recommends taxpayers develop an electronic or paper record-keeping system to store tax documents in one place for easy access. In addition, they should keep copies of filed returns and supporting documents for at least three years.
Another tax preparation best practice is to review income statements for accuracy. Then, call the issuer immediately if any things could be improved in your income statement.
Here is a list of information and documents the IRS will need to process your return
- Social Security number of everyone listed on the return
- Your bank account and routing numbers
- Form W-2
- Forms 1099 from your bank and issuing agencies. Form 1099 also acts as proof of other payments received, such as dividend payouts, unemployment compensation, and pension
- Forms 1099-MISC, 1099-K, W-2, and other income statements (for gig workers)
- Form 1099-INT
- Virtual currency transaction records
Renew Expiring Tax ID Numbers
Before filing their return, taxpayers should ensure their Individual Tax Identification Number or ITIN hasn’t expired. Expired ITINs can be renewed by applying and Form W-7 to the IRS. Failure to renew an expired ITIN before filing a return can result in a delayed refund or ineligibility for certain tax credits. If you do not know how to draft or submit an application, seek the help of an Atlanta tax accountant.
Prepare for What's new.
Leverage the Tax Withholding Estimator to accurately estimate the income tax your employer should withhold from your paycheck. The tool can also assist wage earners in determining if they should submit a new W-4 form to their employer or consider additional tax payments.
Taxpayers should remember that before 2022, Form 1099-K was only issued for third-party payment network transactions if the number of transactions exceeded 200 for the year and their total value was more than $20,000. Now, Form 1099-Ks are issued even for single transactions exceeding $600.
Positive Rate Tax Advisors offers top-notch tax services in Atlanta, Georgia. Our unparalleled ability to tailor tax preparation and filing solutions to our client’s needs sets us apart from other Georgia tax services. To learn more, call (470) 315-1121.