The IRS has a warning for taxpayers who are counting on a tax refund this tax season: You should file a thorough and accurate return to prevent delays.
Although this filing season has gone more smoothly than in years past, it is still crucial to file accurately the first time, according to experts.
How To Avoid Tax Refund Delays?
Being prepared with the essential tax paperwork, known as information returns, sent to the IRS and taxpayers yearly is one approach to minimize potential problems.
Yet, there is one tax duty that is constant regardless of whether you’re filing your taxes manually, using the best tax software available, or hiring a tax expert: compiling all of your official tax paperwork.
Your Form W-2, which is sent to employees of organizations, contains crucial information about your wages and compensation as well as the total amount of taxes deducted from your pay the previous year.
You will receive further 1099 forms that will detail the additional money you received in 2022. These documents could represent retirement payouts, money from freelance work (1099-NEC), unemployment benefits (1099-G), or interest on investments (1099-INT) (1099-R).
Although you might receive a 1099-K form if you received payment using an online payment provider like Venmo or Cash App, doing so is still optional until you made more than $20,000 that year. You must nonetheless record earnings from such services that exceed $600.
Your revenue may appear on different 1099 forms if you work for yourself or are a full-time freelancer. From 2020 onward, 1099-NEC will serve as the de facto form for non-employee compensation, whereas 1099-MISC will be used for other types of income, such as awards, prizes, and rent.
Your 1099-G form will include payments from local or state programs, but the majority of Americans won’t be required to declare state refunds from the previous year. And although the taxability of that money is difficult, if you received Social Security benefits, you ought to have gotten an SSA-1099 in January.
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Taxable Income
Tax credits immediately lower your tax payment, whereas tax deductions lower your taxable income. Making sure you have all the required paperwork in order to claim credits and deductions that lower your tax bill is essential if you want to receive the largest tax refund possible.
There are seven 1098 forms, each of which contains a large portion of the information you’ll need for tax credits and deductions.
The typical Form 1098, which details the amount of mortgage interest you paid in the previous tax year, is the most crucial tax document for many homeowners. Also, it includes any mortgage points paid in 2022 for a home purchase. If you choose to itemize, both sums are tax deductible.
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