Tax season 2023: IRS advises early filers to consider filing an amended return if they reported tax refunds as taxable

Asher Notheis

April 12, 02:06 PM April 12, 02:06 PM

Taxpayers who jumped early on filing their taxes this year might want to file an amendment if they reported certain refunds they received last year as taxable.

The IRS issued a clarification in February regarding the federal tax status for special payments issued to taxpayers in several states last year, in which the agency determined that taxpayers in many states did not need to report these payments on their tax returns. Because of this, taxpayers who filed prior to this clarification on Feb. 10, as tax season started on Jan. 23, should check if filing an amendment is in order, the IRS announced Tuesday.

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The states where residents are not required to report these state payments on this year's tax return are California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island. For residents of Alaska, the only state payment they do not need to report on their 2022 taxes is the supplemental Energy Relief Payment they received.

Residents of Georgia, Massachusetts, South Carolina, and Virginia are also not required to include special state 2022 tax refunds as income under certain conditions. These conditions consist of if the payment residents received was a refund of state taxes paid, as well as if the recipient either claimed the standard deduction for the tax year 2022 or itemized their tax year 2022 deductions but did not receive a tax benefit.

Taxpayers who think they meet these requirements and filed prior to Feb. 10 should check their tax return to see if they paid tax on a state refund before filing an amended return. For taxpayers who used a tax professional when filing taxes, they should check with said professional to determine if filing an amended return is called for.

A taxpayer can also opt to send in a paper amendment, though they will not receive their refund through direct deposit and instead receive a paper check.

Taxes are due on April 18, not April 15, due to it falling on a weekend this year. In addition, April 17 is recognized as Emancipation Day in Washington, D.C., and all Washington holidays affect tax deadlines across the United States, meaning that tax returns will be due on the following business day, April 18.

Taxpayers who are awaiting their refund can check online using the IRS's "Where's my refund" tool, which is free to use.

Tax Season 2023: IRS warns of questionable tax preparers ahead of tax filing deadline

Asher Notheis

March 28, 04:26 PM March 28, 04:27 PM

With the end of this year's tax deadline in sight, the Internal Revenue Service has increased its warnings regarding scams targeting taxpayers, this time with its latest alert on "unscrupulous" tax return preparers.

When dealing with these types of tax preparers, taxpayers should keep their eyes peeled for any potential warning signs, which include preparers charging taxpayers a fee based on the size of their refund and "ghost" preparers refusing to sign the tax return or asking taxpayers to sign a blank return. To ensure one's information is secure, a person should rely on a trusted tax professional with their taxes, the IRS advised Monday.

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"Most tax professionals offer excellent advice and can really help people navigate complex tax issues," IRS Commissioner Danny Werfel said. "But we continue to see instances where taxpayers are 'ghosted' by unscrupulous tax preparers with bad advice who quickly disappear. We encourage taxpayers to check out the tools and resources available to them to ensure they find the right tax professional for their needs."

When choosing a tax preparer this year, taxpayers should check several things before selecting who will prepare their taxes, including if the professional has an IRS preparer tax identification number, which is required for them to prepare taxes. Ultimately, the best tax preparer comes down to what the taxpayer needs and should be selected on a case-by-case basis.

This latest warning from the IRS is a continuation of its "Dirty Dozen" series that it has been doing to warn taxpayers of scams that proliferate during tax season. Previous warnings by the IRS in this series include warnings of phishing emails and scammers offering "help" to set up an online IRS account.

Federal tax returns are due by April 18 this year. This deadline also applies to filing for an extension to file one's taxes.

More information on the tax scams the IRS has warned about can be found on the IRS's website.

Tax Season 2023: Steps to take to make tax filing easier

Asher Notheis

March 07, 01:30 PM March 07, 01:30 PM

Tax season is often considered one of the most stressful times of the year, but there are some steps taxpayers can take to help minimize stress when filing taxes this year.

Taxes are due this year on April 18 for a majority of taxpayers, leaving most taxpayers with only six weeks left to finish their tax filing. For any taxpayers who are in the middle of filing their 2022 taxes or for those who have yet to start, taking these steps can help alleviate the stress that comes with filing taxes, according to Barron's.

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"If taxpayers can improve efficiencies on their end, it will help the timeliness in not only submitting a return but in having it processed and getting a refund," said Brooke May, a managing partner at the financial planner Evans May Wealth.

File for an extension

If a taxpayer has an extension to file their taxes but still files them before the April 18 deadline, the taxpayer can simply refile their taxes if they realize information on their returns needs correction.

Taxpayers filing for an extension on their tax returns will be given until Oct. 15 this year to file their taxes; taxpayers should know, however, that receiving an extension to file taxes does not delay the due date of when they need to pay their taxes.

Open an IRS account

Taxpayers who have their own IRS account can have access to all of their personal tax records needed when filing taxes, such as their adjusted gross income and digital copies of notices from the IRS. This information can also save taxpayers time from having to call the IRS to answer any questions they might have, as they may be able to find the answers to their questions via the information in their accounts.

Call the IRS early in the morning

The early bird tends to get the worm, and the early riser has a better chance of contacting someone at the IRS.

In 2022, only 13% of people calling the IRS were able to make contact with someone at the agency, according to the Taxpayer Advocate Service, an office within the IRS.

Though the IRS has its call hours of availability from 7 a.m. to 7 p.m., the hold times for callers who call between 7 a.m. to 9 a.m. "seem to be shorter," said Angela Anderson, an accountant in Atlanta.

Check what forms can be e-filed

Though not all tax forms can be accepted by the IRS electronically, the agency is working to expand the range of documents that can be filed electronically. In March, the IRS announced that nine notices regarding child tax credits and earned tax income credits can finally be shared with the IRS electronically.

Additionally, amended tax returns can also be filed electronically so long as the original tax return was filed electronically as well. In cases where the original tax return was filed via the mail, the amended return must also be filed in the same way.

Establish a paper trail

Taxpayers who wish to avoid a worst-case scenario this tax season, such as their tax return getting lost in the mail, ought to keep copies of all of their mailings regarding tax returns. Additionally, taxpayers should send their returns via certified mail and also specify on their check what the payment is for, as recommended by Michael Kramarz, a director at Kaufman Rossin Tax Services Advisory Group.

"You have to maintain documentation to establish your original filing date," Kramarz said.