Handy Last Minute Tax Filing Prep Checklist
By now I’m sure you’ve heard that the 2023 tax season is upon us 
E-file opened on January 23rd, and the filing deadline for most taxpayers is set for April 18th, 2023. After three years of pandemic tax chaos, the IRS is pushing towards a return to normalcy. The previous tax delays have definitely shifted, with reports from the IRS stating they’ve sent roughly 11% more refunds than last year, as of March 3rd.
For the average taxpayer that translates to firmer deadlines and, likely a speedier return after you file. As of February 3rd, the IRS had already processed about 17 million income tax returns, which is 29.1% more than they had on the same date in 2022.
But if you aren’t one of these Americans who have already filed, DON’T PANIC! There’s still plenty of time to file your federal income taxes and get that sweet, sweet return check you may be due.
To help out, CARD created this handy, comprehensive last-minute tax filing checklist.
Take a deep breath and review this guide before you sit down to file online, fill out tax forms, or leave for your tax provider appointment.
Gather up your info and paperwork
Whether it’s you, your CPA uncle, or a tax professional filing your income tax return, you’re still going to need to go through your files and dig up the important paperwork.
It might also be helpful to make a list of any important dates and numbers (listed below) that may not appear on paperwork.
1. Personal Info
Perhaps a no-brainer, but the IRS needs to know exactly who is filing, what family members are covered in your filing, and where to send your return check.
You’ll need the following information for yourself, your spouse, and any dependents you plan on claiming…
- Name (as it appears on your social security card)
- Social Security number
- Date of birth
- Home address
- Bank account and routing number (for receiving your return via direct deposit)
2. Income Paperwork
The first things to dig up are the copies of your federal and state tax returns from last year. Remember that you file taxes in the spring for the previous year, so in 2022 you filed for your earnings during 2021.
- W-2 forms for you and your spouse
Employers are required to have sent you your W2 by January 31st!
- 1099 forms
These forms are used to declare income that came from somewhere other than your employer, and there are over 10 different versions (with different suffixes). These forms report additional income from things like freelance or contract work, payments from retirement plans, even miscellaneous earnings like prize money or scholarship funding. If you’re not sure how the 1099 form (or forms plural) you received will affect your 2023 filing, check out this Nerdwallet guide and consult a tax professional.
- SSA-1099 for Social Security benefits received
- Rental property income and expenses
- Alimony payments received (if your divorce/separation settlement is dated on or before December 31, 2018)
- Proof of cryptocurrency transactions
3. Self-Employment Paperwork
If you are self-employed or a business owner, you’ll need specific 1099 forms. For a full overview of self-employed taxpayer responsibilities, see the IRS Self-Employed Tax Center. Here is what you might be expected to have…
- 1099-NEC or 1099-K forms used to report independent contractor income
- Records of business income and expenses
- Home-office documentation
- Business-related travel records
Figure out your deduction strategy
A tax deduction reduces the amount of your income that is taxed, therefore lowering your tax bill (a.k.a. reducing your tax liability). Tax deductions are subtracted from your total taxable income, while tax credits are subtracted from your actual tax bill.
How do tax deductions work?
There are two ways to claim deductions:
1. You can claim a standardized deduction, a flat amount subtracted from your adjusted gross income (AGI) that is calculated based on your filing status/tax bracket.
OR
2. You can itemize your deductions and take advantage of individual deductions. Gathering documentation is key, and itemization can take extra time.
Having trouble deciding between deduction methods or confused about the process?
Take a look at this breakdown of the 2022-2023 Standard Deduction, this IRS guide titled “Should I Itemize?” and/or consult a tax expert.
Examples of common itemized deductions
There are a wide variety of tax deductions that can help you reduce your tax bill and/or increase your refund. The IRS recommends that you consider itemizing if you’ve spent significantly on the following…
You can deduct cash contributions to charitable organizations if you itemize them on Schedule A of your Form 1090. Your contributions typically cannot be more than 60% of your adjusted gross income (AGI), or up to 25% of taxable income from corporations. Note: This deduction doesn’t cover donations to individuals. So unfortunately, that GoFundMe you donated to probably doesn’t qualify for a deduction unless it is linked to a registered charity or nonprofit organization.
Did you pay interest or premiums on a home mortgage loan in 2022? You may be able to have all, or part of the interest payments deducted using form 1098. Keep in mind that both your home and your mortgage loan must meet specific requirements laid out in this IRS publication. If you’re having trouble deciphering if your mortgage qualifies or figuring out your deduction limits, consult a tax professional. Here’s a link to the IRS Interactive Tax Assistant (ITA) that can help with basic queries.
If you paid out-of-pocket for medical care for yourself, your spouse or your dependents and were not reimbursed by your insurance, you may be able to deduct some of that expenditure. You can only deduct expenses that amount to more than 7.5% of your AGI (adjusted gross income). For example, if you make $50,000 per year, only the out-of-pocket medical payments greater than $3,750 (7.5% of $50K) can be deducted. Visit this IRS page for details on what qualifies as a “medical expense.”
If a natural disaster damaged your property or if you suffered losses from theft, you may be able to have some of the losses deducted. Generally, you can only deduct losses that occurred within the tax year (2022), with some exceptions (see Revenue Procedure 2016-53). If you’re considering deducting losses, definitely read through the IRS’s detailed publication on the topic and consult a tax expert.
Business expense deductions for self-employed and
small business owners
If you had 1099 (non-employee) income coming in from freelancing, contracting, or owning your own business, you may be eligible for a whole other set of deductions.
Here’s a link to a great list of 25 of the most common business expense deductions for freelancers and small businesses.
Looking for information on tax credits? Check out this other article with a list of popular credits, as well as details on important changes to tax policy for 2023!
Estimate how much you’ll owe
Calculating your tax bill ahead of time has different advantages for different taxpayers.
If your primary income doesn’t come from an employer (1099 income) and you aren’t having taxes withheld from each paycheck, you’ll need to set aside a chunk of your income to pay taxes in the spring. Using a calculator can give you an idea of how much money you should have on hand (experts recommend setting aside 25-35% of your AGI).
Even if you did have taxes withheld, getting an idea of what your tax bill should look like makes you more likely to spot a mistake made by you or your provider when filing.
One of the benefits of filing in the internet age is that now you can sit down in front of a computer with your income documents, plug in some values and let a calculator do the work for you!
Here are three free, reliable tax calculators:
- How Much Should I Set Aside For 1099 Taxes? – a free calculator from KeeperTax for self-employed taxpayers
- Nerdwallet’s Federal Income Tax Calculator
- The IRS’s Tax Withholding Estimator
The final step… FILE!
There are a handful of different ways to file your taxes. One isn’t necessarily better than the others, but keep in mind that they require different levels of organization and have different associated costs.
- DIY on paper
Fill out form 1040 and carefully follow IRS instructions. Note that if you’re mailing in your tax forms, the IRS says that it can take up to 6-8 weeks to get your return.
- DIY with a filing software
Using a filing software can save you a lot of hassle and keep the papercuts at bay. H&R Block, TurboTax, and TaxAct are some of the more popular, more affordable options, but take a look at this review for more details and options.
- Pay a tax provider to do it for you
While this tends to be the costliest option, this method can save you a headache! And prevent user error.
- Look into low-cost or free tax help
You may qualify for free tax prep and e-filing aid through the Volunteer Income Tax Assistance Program (VITA). Through this project, IRS-certified volunteers provide tax services to lower-income, disabled, and English-limited taxpayers. Use their convenient locator tool to find free tax help near you.
There’s also Free File Alliance, a coalition of tax software companies who have banded together with the IRS to help provide free tax preparation services. Check out their website to see if you qualify for their pro-bono services.
Recap
It’s never too late to get organized for tax season! If you haven’t filed yet, don’t stress – you’re in good company and have plenty of time.
Just remember the filing deadline… *April 18, 2023*.
For details on changes to tax policy (new income brackets, inflation adjustments, and new credits) read this article with Everything You Need to Know About Tax Season 2023.
From CARD to you and yours, happy filing! 💸
Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction or filing taxes.