Get Ready to Prepare Your Tax Return
As 2023 approaches, now is the time to start getting ready for filing your federal tax return. Whether you’re a new taxpayer or a seasoned veteran, there are certain steps you should take to prepare for filing your taxes. The last thing you want to do is scramble at the last minute to collect all the necessary documents and information. Here is a list of steps you can take to get ready for filing your federal tax return.
Check Your Tax Filing Status
The first thing to do when preparing to file your federal tax return is to check your tax filing status. Your filing status determines the tax forms you must use, the amount of income you can earn and the amount of taxes you must pay. Depending on your filing status, you may be eligible for certain tax credits or deductions. To determine your filing status, you will need to consider factors such as your marital status, your age, and any dependents you may have.
Gather Required Documentation
Once you know your filing status, it’s time to gather all the required documents and information to complete your tax return. This includes your income information, such as W-2s, 1099s, and any other documents related to your income. You will also need to collect any documents related to deductions, such as mortgage interest statements, charitable donation receipts, and any other documents related to deductions you may be claiming. Make sure to keep all of your documents organized and in a safe place, so they are easily accessible when it’s time to file your tax return.
Choose Your Tax Filing Method
Now that you have all the required documents, it’s time to decide how you’re going to file your federal tax return. You have the option of filing your taxes yourself, using tax software or an online tax service, or you can hire a tax professional to do it for you. Each method has its own advantages and disadvantages, so consider all your options before making your decision.
Determine Your Tax Liability
Before filing your federal tax return, it is important to determine your tax liability. This includes calculating your income, deductions, credits, and other factors that can affect your tax liability. Use the Internal Revenue Service’s (IRS) online calculator to determine your total tax liability. This will help you to know how much you need to pay when you file your federal tax return.
Check For Tax Incentives
The IRS offers a variety of tax incentives and credits that can help reduce your tax liability. These include the Earned Income Tax Credit (EITC), the Child and Dependent Care Credit, and the Retirement Savings Contributions Credit. Check with the IRS to see if you qualify for any of these tax credits and incentives.
Check Your Withholding
When filing your federal tax return, it’s important to make sure you have the right amount of taxes withheld from your paychecks. If you have too much tax withheld, you may be due a refund when you file your return. On the other hand, if you don’t have enough tax withheld, you may owe money when you file your return. Use the IRS’s withholding calculator to make sure you’re having the right amount of taxes withheld from your paycheck.
File Your Federal Tax Return
Once you’ve taken all the necessary steps to prepare for filing your federal tax return, it’s time to file. You can file your return yourself, using tax software or an online tax service, or you can hire a tax professional to do it for you. Either way, make sure to double-check your return for accuracy before submitting it. Once your return is filed, you can check on the status of your refund using the IRS website.
Stay Organized for Next Year
Once you’ve filed your federal tax return, it’s important to stay organized for next year. Set up a filing system for your tax documents, and store them in a safe place. Make sure to keep track of your income and deductions throughout the year, so you can easily calculate your tax liability when it’s time to file again. Following these steps will help you to stay organized and prepared for filing your federal tax return in 2023.