The Internal Revenue Service (IRS) reminded taxpayers who received an extension to file their 2022 returns to do so within the next few weeks.
Taxpayers from disaster-affected regions who received such extensions must file their returns by the Feb. 15 deadline, the agency said in a Jan. 31 press release. “Eligible taxpayers were those affected by various disasters that occurred between Aug. 8 and Oct. 9, 2023. This included Hurricane Idalia, Hurricane Lee, Tropical Storm Bolaven, the wildfires in Hawaii, the seawater intrusion in Louisiana, and storms and flooding in Illinois.”
- 49 counties in Florida
- 32 counties In Georgia
- all of Guam
- Maui and Hawaii counties in Hawaii
- Cook County in Illinois
- five parishes in Louisiana
- all 16 counties in Maine
- all 14 counties in Massachusetts
- six islands in the Northern Mariana Islands
- all 46 counties in South Carolina
While the time for filing was extended, payments were not extended since the tax returns were due last spring “before any of these disasters occurred,” the IRS notes. As such, nonpayment of 2022 tax dues may attract penalties and interest.
According to the IRS, the agency will not reduce any interest on taxes that were due in prior years. However, it will consider waiving late-payment penalties provided the taxpayer is able to prove that they were late due to a reasonable cause linked to the disaster.
“The IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area,” the agency said.
“Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers who assisted with relief activities who are affiliated with a recognized government or philanthropic organization.”
Individuals who sustain a loss that is attributable to the disaster can deduct such losses from their tax returns. However, in some cases, the losses could be deducted in the year following the disaster.
2024 Tax Filing
The 2024 tax-filing season began this week, and the IRS is currently accepting and processing federal individual tax returns.On Tuesday, the agency published a checklist aimed at helping taxpayers prepare for their 2023 tax year returns this season. The IRS recommended that taxpayers have all “important and necessary documents” with them when preparing their returns as this will help in filing a “complete and accurate tax return.”
“Errors and omissions slow down tax processing, including refund times,” the agency stated. Some of the key documents taxpayers should have with them are: Social Security numbers; bank account and routing numbers; tax forms like W-2s, 1099s, 1098s, and other income documents or records of digital asset transactions; and IRS letters citing an amount received for tax deductions or credits.
All types of incomes should be reported to the IRS including part-time or seasonal work, self-employment, services provided via mobile apps, investment income, and goods sold through online platforms.
The IRS asked taxpayers to “avoid paper returns” and instead file them electronically. “Filing electronically with direct deposit is the fastest way to receive a refund.”
“For those waiting on their 2022 tax return to be processed, here’s a special tip to ensure their 2023 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year’s adjusted gross income (AGI) on the 2023 tax return. Everyone else should enter their prior year’s AGI from last year’s return.”
People whose incomes were less than $79,000 last year can file for free electronically via the IRS’s Free File program. Taxpayers who need in-person help with filing taxes can use the agency’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.
These initiatives offer free basic tax return preparation for qualified individuals. The following people are eligible for the service: taxpayers who make $64,000 or less, people with disabilities, and those who speak limited English.
A question regarding digital asset transactions appears on top of relevant tax forms and has been updated this year to ask: “At any time during 2023, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”
All taxpayers filing forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120, and 1120S must answer the question regardless of whether they conducted digital asset transactions or not.
