Damirkudik |: E+ |: Getty Images:
This is an excerpt from the Personal Finance team’s weekly Twitter Space, “This week, your wallet.” Watch the latest episode hereand tune in every Friday at 11 a.m. ET.
Tax season started on January 23rd. The IRS expects taxpayers to file more than 168 million returns, most by the April 18 deadline.
Here are some key things to know before filing, according to CNBC Senior Personal Finance Correspondent Sharon Epperson and Personal Finance Correspondent Kate Dore.
1. Application and tax assistance may be free
Certain taxpayers can use free (and often underutilized) resources when filing a return.
Free File is available to 70% of taxpayers, but few use it, and they may unwittingly pay to file a return.
The IRS also offers fillable forms, which are electronic federal tax forms that you can fill out and submit online for free. It’s essentially a pencil and paper version for DIYers.
You may also be eligible for free tax help at a local volunteer income tax assistance center, which is generally available to people who make $60,000 or less, people with disabilities, or limited English. Those 60 and older can also get help with tax advice for seniors.
You can find the nearest VITA or TCE site on the IRS website.
2. When to file a tax return?
In most cases, you should file as soon as possible to get a faster refund and reduce the chance of a fraudster claiming a refund in your name; identity theft.
However, you need all the relevant tax forms to file and not all are available yet. You can use last year’s tax return to understand what forms you may need. They can be mailed to you or available online. (In addition to tax forms, be sure to have receipts for applicable tax deductions and credits handy.)
If you owe a tax bill and are concerned that you don’t have the money to pay now, you can delay filing your return, generally until April 18. penalty reduction bill.
3. Dates and amounts of tax refunds
In general, you should receive a refund within 21 days.
Double-check your return for key details and basic errors, such as typos in your name, address, date of birth, bank information, and Social Security number. Errors may delay refunds.
The IRS has warned that tax refunds could be smaller this year. Pandemic-era tax benefits such as top-ups to the Child Tax Credit, Child and Dependent Care Credit and Earned Income Tax Credit are no longer available.
4. What to do with the tax refund?
It may be wise to save and not spend your compensation this year. Having a bigger financial cushion is important in the environment economic uncertainty.
Taxpayers can earn roughly 3% to 4% on that cash through an online bank that offers a high-yield savings account. They may also want to contribute to a pre-tax or Roth individual retirement account.
5. Smoother customer service
Those with tax questions may experience smoother IRS customer service this year compared to the recent past.
The Inflation Relief Act boosted funding for the agency, which began changes such as the hiring of 5,000 new customer service representatives and new technology that allows people to respond to some notices online.
Last year, only 13% of callers reached a representative. The IRS hopes to reduce phone wait times to 15 minutes.
.
[ad_2]
Comments