Top IRS tips for smooth tax filing

LEARN HOW YOUR PLANNED GIFT CAN HELP THE AMERICAN LEGION

On Jan. 29, the Internal Revenue Service (IRS) opened tax-filing season for 2023 returns. The IRS published a checklist in IR-2024-28 to help "make tax preparation smoother in 2024." This information is also generally available on IRS.gov. There are six general topics covered in the checklist, helpful recommendations for all taxpayers.

Necessary Tax Paperwork All taxpayers should gather the paperwork for a complete and accurate tax return. This could include Social Security numbers for all the individuals on the return, bank account and routing numbers for payments or refunds, all income documents such as Forms W-2, Forms 1099, Forms 1098, and any records of cryptocurrency or other digital sales. Taxpayers should also have their Health Insurance Marketplace statement, Form 1095-A. Any letters received from the IRS are also important.

Report All Income The general rule is that all income of any source or type is taxable. This could include income from sales of property on an online platform, interest, dividends and capital gain from financial service company accounts, payments for part-time, seasonal or self-employment work, and other payments received through personal efforts.

File an Electronic Return There are several benefits of an electronic return. Taxpayers will avoid many of the math errors that are quite common with paper returns; tax software does the math and avoids most mistakes. It also uses a question-and-answer method that enables individuals to file the correct amounts in the different sections. If taxpayers are one of the few still waiting for a paper 2022 tax return to be processed, here is an important tip: enter in $0 for the 2022 adjusted gross income (AGI) when filing the 2023 tax return. Other taxpayers should enter the correct AGI from the prior-year return if it has been processed.

Free Resources and Assistance There are multiple resources on IRS.gov. If taxpayers have a 2023 income of $79,000 or less, use of the IRS Free File system is available. There are eight Free File software providers in English, and one in Spanish, that provide free tax software. If an individual has a higher income, they can use the IRS Free File Fillable Forms. This is an electronic version of the paper forms but does require significant knowledge of taxes to prepare the return. Taxpayers also may benefit from one-on-one tax assistance. This is available through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

Best Filing Option There are several different methods that will meet the needs of taxpayers. If an individual has a background in taxes, it may be a good idea to personally prepare the return. Many individuals will also use the Free File or commercial tax-preparation software. Another option is to hire a tax professional. Be careful to select an honest and capable tax professional, and be cautious about any tax professional who is a "ghost" preparer. If the professional is not willing to sign the return and provide their Preparer Tax Identification Number (PTIN), it may not be wise to use that return. There is a Directory of Federal Tax Return Preparers available on IRS.gov that may assist taxpayers in selecting a qualified tax preparer.

Use Online Resources Taxpayers can avoid sitting through long hold times on a call to the IRS by instead using the agency’s website, available 24 hours per day. Taxpayers may find the upgraded version of the Interactive Tax Assistant tool or the Let Us Help You resources beneficial.

The IRS reminded taxpayers to stay updated; there are additional resources that may be helpful. Taxpayers can download the IRS2Go smartphone app. There also are many IRS YouTube videos that explain different concepts. Taxpayers also can follow the IRS on their favorite social media sites or subscribe to its email newsletters.

Note: The IRS expects 146 million individual tax returns to be filed by April 15. There are extended hours at 250 Taxpayer Assistance Centers (TACs) across the country. The IRS expects increased use of the "Where's My Refund?" tool. Commissioner Danny Werfel stated, "For months, IRS employees have been working hard to be ready to help taxpayers and make tax season as easy and smooth as possible. We have taken important steps to add more improvements to help taxpayers, ranging from expanded in-person hours and better online options to improved phone service."

The American Legion’s Planned Giving program is a way of establishing your legacy of support for the organization while providing for your current financial needs. Learn more about the process, and the variety of charitable programs you can benefit, at legion.org/plannedgiving. Clicking on “Learn more” will bring up an “E-newsletter” button, where you can sign up for regular information from Planned Giving.