Preparing for the 2024 Tax Season: A Proactive Approach

by | Dec 12, 2023 | blog

It might seem a bit early to start contemplating the 2024 tax season, but the Internal Revenue Service (IRS) is urging taxpayers to adopt a proactive approach. Early preparation not only ensures a smoother filing process but also helps you stay ahead of changes and enhancements. In this comprehensive guide, we’ll explore essential aspects to consider for the upcoming tax season, highlighting key changes, tips for smooth filing, and important deadlines.

Changes on the Horizon: Online Account Portal Enhancements
One significant change taxpayers should be aware of involves enhancements to the Online Account portal. This upgrade enables you to view and electronically sign powers of attorney and disclosure authorizations directly online through your tax professional. This streamlined process aims to simplify communication and collaboration between taxpayers and their tax professionals.

Refund Expectations and Cautionary Notes
While anticipating a tax refund is a common expectation, the IRS issues a caution against setting specific dates for refunds. Additional reviews may be necessary due to errors, suspected fraud, or claims for credits like the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC), which cannot be issued until mid-February. Being mindful of potential delays and managing expectations can contribute to a more stress-free tax season.

Estimated Tax Payments and Withholding Estimator
To stay on top of your tax responsibilities, ensure that your final estimated tax payment for 2023 is made by January 16th. The IRS provides a helpful tool, the Tax Withholding Estimator, which can assist you in determining whether an additional payment is required. Being proactive in estimating and managing your tax liability can prevent surprises during the filing process.

Document Organization: Gather Early, File Accurately
Commence the process of gathering all necessary tax documents early. This includes items such as W-2s, 1099s, and records of transactions like cryptocurrency dealings. Being organized in advance not only saves time but also helps ensure accurate and complete filing. Early preparation allows you to address any discrepancies or missing documents promptly.

Changes in Reporting Thresholds: Form 1099-K
A noteworthy change to be aware of is the delayed implementation of the lower $600 threshold for Form 1099-K reporting. While the reporting threshold has been lowered, it won’t take effect until 2024. It’s crucial to understand that income remains taxable, regardless of whether you receive the corresponding forms.

Tax Credits and Incentives: Electric Vehicles and Home Improvements
If you’ve purchased an electric vehicle or made home energy improvements, explore whether you now qualify for expanded credits under the Inflation Reduction Act. Forms 8936 and 5695 are instrumental in claiming these credits. Staying informed about available credits can potentially lead to significant savings on your tax liability.

Filing Strategies for Speedy Refunds
As a timeless piece of advice, consider electronically filing your tax return and opting for direct deposit. This method remains the fastest way to obtain refunds. Veterans also have specific banking access options, so explore these avenues if applicable.

Wrapping Up: A Stress-Free 2023 Tax Season
Taking action on these IRS reminders now can pave the way for a stress-free filing experience when the 2024 tax season arrives. Early preparation, awareness of changes, and proactive management of your tax obligations contribute to a smoother process. If you have any questions or need assistance in preparing for the next tax season, don’t hesitate to seek professional guidance.

In conclusion, stay ahead of the game by embracing these strategic steps. The early bird not only catches the worm but also enjoys a more seamless tax season. As you embark on this journey, keep in mind that preparation is the key to a successful and stress-free filing experience. Here’s to a successful 2024 tax season!

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