Note: Always consult a tax professional for your specific financial situation.
If you have already filed your 2022 taxes, bravo! Some have not. Some are procrastinating. Others might have been receiving documents through mid-March, depending on investments held, and are just beginning the process. Please review your documents carefully, and make sure that information is correct. If not, ask for a correction before you file.
The deadline for filing 2022 taxes is April 18, 2023. You may file an automatic extension, but taxes are due on the April date. Don’t wait to file until the extended due date; file as quickly as you can. A relocation, an illness, or a family death could happen to you or your preparer (consultant) in that time frame and create more complications.
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Here are some issues and information for your consideration:
- Look for changes in the first few pages of instruction publications of the IRS forms and schedules that have been used in other years to report your income. Find them at www.irs.gov/forms-instructions. For example, some of the changes mentioned in the Form 1040 2022 include Clean Vehicle Tax Credits, Residential Home Improvement Energy Credits, and Increases in Standard Deductions.
- If you changed jobs in 2022, make sure you have not overpaid the FICA withholding.
- If your spouse died in 2022, you can still file 2022 taxes as married as long as you have not remarried in 2022. But next year, 2023, you must file as single if you have not remarried or have no dependents. This can cause tax consequences you should consider and prepare for. For example, a lower single income is taxed at a higher rate than married income. If your spouse was the higher income earner, there will be a change in tax owed, but it might be a manageable increase, or it could be less. If you are the higher income earner, you will have a lower standard deduction, and you might pay taxes at a higher rate.
Investigate the above changes or discuss them with your tax preparer. Be prepared.
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If you have overpaid taxes this year, you may apply the refund to 2023 taxes. If you are required to make estimated payments, the overage might save a quarter filing of the estimated tax for 2023. You can also ask for a refund to place in savings until next year. Also, if you need to convert an investment to cash, be aware of the tax consequences.
Possibly your spouse always did the tax filings, and this is new to you. If you are overwhelmed, get help. If a mistake is made or some income or deduction is overlooked, you can always file an amended return. Try to file by April 18.
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