TSCPA News

Tax Planning and Preparation Tips for 2023

December 28, 2022

Tax planning can help you file an accurate tax return and avoid processing delays that can slow down your refund. There are steps everyone can take now to get ready to file their 2022 federal income tax return.

Steps To Take Now

Gather and organize your tax records
Organized tax records make preparing a complete and accurate tax return easier. It helps you avoid errors and may also help you find overlooked deductions or credits.

Wait to file until you have your tax records, including:

  • Forms W-2 from your employer(s)
  • Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, pension, annuity or retirement plan distributions
  • Form 1099-K, 1099-MISC, W-2 or other income statement if you worked in the gig economy
  • Form 1099-INT if you were paid interest
  • Other income documents and records of digital asset transactions
  • Form 1095-A, Health Insurance Marketplace Statement
  • IRS or other agency letters
  • CP01A Notice with your new Identity Protection PIN

Notify the IRS if your address changes, and notify the Social Security Administration of a legal name change.

Create or access your IRS online account
With an IRS online account, you can securely access the latest information about your federal tax account and information from your most recently filed return. Among other things, you can view tax owed, payments and payment plans; make payments and apply for payment plans; and access your tax records.

Check your Individual Tax Identification Number (ITIN)
An ITIN only needs to be renewed if it has expired and is needed on a U.S. federal tax return. If you do not renew an ITIN, the IRS can still accept your return, but it may delay processing the return or delay credits owed to you.

If your ITIN was not included on a U.S. federal tax return at least once for tax years 2019, 2020 and 2021, your ITIN will expire on Dec. 31, 2022. For more information, see Individual Taxpayer Identification Number.

Make sure you have withheld enough tax
Credit amounts may change each year, and the Interactive Tax Assistant (ITA) at IRS.gov can identify whether you qualify for tax credits that may call for a withholding adjustment. Life changes like getting married or welcoming a child may also mean changing withholding. You can use the Tax Withholding Estimator on the IRS website to help determine the right amount of tax to have withheld from your paycheck.

If you receive a substantial amount of non-wage income, consider making quarterly estimated tax payments. For those making estimated tax payments, the last payment for 2022 is due Jan. 17, 2023.

Get banked to speed tax refunds with direct deposit
The fastest way to get your refund is by filing electronically and choosing direct deposit. Direct deposit also avoids the possibility that a refund check could be lost or stolen or returned to the IRS as undeliverable.

Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on your tax return. Check with the mobile app provider or financial institution to confirm which numbers to use.

If you are a veteran, see the Veterans Benefits Banking Program for access to services at participating banks.

What's New This Year

More taxpayers may receive a Form 1099-K
Form 1099-K, Payment Card and Third-Party Network Transactions, is an IRS information return used to report certain payment transactions. The American Rescue Plan of 2021 changed the reporting threshold for third-party settlement organizations (TPSOs), including payment apps. The new threshold requires reporting of transactions in excess of $600 per year, changed from the threshold of an excess of 200 transactions per year and an excess of $20,000. TPSOs are required to report payments for goods and services.

On Dec. 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold. For calendar year 2022, TPSOs who issue Forms 1099-K are only required to report transactions where a payee’s gross payments exceed $20,000 and there are more than 200 transactions. For more information, see Understanding Your Form 1099-K.

2022 changes that may affect your refund

  • No stimulus payments: There were no new stimulus payments for 2022, so taxpayers should not expect to get an additional payment in their tax refund.
  • Some credits return to 2019 levels: Those who got $3,600 per dependent in 2021 for the Child Tax Credit (CTC) will, if eligible, get $2,000 for 2022. For the Earned Income Tax Credit (EITC), eligible taxpayers with no children who received roughly $1,500 in 2021 will get $500 for 2022. The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
  • No above-the-line charitable deductions: During COVID, taxpayers were able to take up to a $600 charitable donation deduction on their tax returns. For 2022, taxpayers who do not itemize and who take the standard deduction will not be able to deduct their donations.
  • More people may be eligible for the Premium Tax Credit: For tax year 2022, taxpayers may qualify for temporarily expanded eligibility for the Premium Tax Credit.
  • Eligibility rules changed to claim a Clean Vehicle Credit: Review the changes under the Inflation Reduction Act of 2022 to qualify for a Clean Vehicle Credit.

How To Understand Refund Timing and Avoid Delays

Many factors can affect the timing of your refund. Although the IRS issues most refunds in less than 21 days, it cautions taxpayers not to rely on receiving a refund by a certain date.

Identity Theft and refund fraud
Some returns may require additional review and may take longer. The IRS and its partners in the tax industry continue to strengthen security reviews to help protect against identity theft and refund fraud.

IRS cannot issue EITC and ACTC refunds before mid-February
Refunds for people claiming the EITC or Additional Child Tax Credit (ACTC) cannot be issued before mid-February as the law requires the IRS to hold the entire refund.

Returns requiring manual review
Some returns may need manual review, delaying processing if IRS systems detect a possible error, the return is missing information, or there is suspected identity theft or fraud. Some situations require the IRS to correspond with taxpayers. In cases where the IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer. This work requires special handling by an IRS employee, so it may take the IRS more than 21 days to issue any related refund.

Resources and Online Tools

File your taxes

  • Use IRS Free File: Starting January 2023, nearly everyone can file electronically on IRS.gov or with the IRS2Go app. The Free File program offers eligible taxpayers tax preparation software to use at no cost. Some packages also offer free state tax return preparation.
  • Find a tax professional: There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs) and attorneys. TSCPA’s Find A CPA tool is a free online service to help connect you with a CPA in your geographic region that can best meet your financial and business needs.
  • Use the VITA Locator Tool: The IRS' Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. Use the VITA Locator Tool to find a site near you.
  • Use the Interactive Tax Assistant (ITA): Starting January 2023, use the ITA to find out if life event changes make you eligible for credits you did not qualify for in the past and get answers to general tax questions.
  • Use MilTax: Members of the armed forces and some veterans may take advantage of MilTax. This free tax resource is offered through the Department of Defense.

Get your refund status
After you file, check the status of your refund using the IRS “Where's My Refund?” tool. The status will be available within 24 hours after the IRS accepts your e-filed tax return. The tool updates once every 24 hours.

Get more information

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