IRS Advises Taxpayers to ‘Get Ready’ for Filing 2023 Income Tax

Internal Revenue Service (IRS) building in Washington on Oct. 16, 2023. (Madalina Vasiliu/The Epoch Times)

The Internal Revenue Service (IRS) issued a reminder to individual taxpayers, suggesting several steps they can take to ease the process of filing returns for the upcoming tax filing season.

“With the nation’s tax season rapidly approaching, the Internal Revenue Service reminds taxpayers there are important steps they can take now to help ‘get ready’ to file their 2023 federal tax return,” the agency said in a Nov. 13 press release. It recommended taxpayers log in online to their IRS account and obtain the necessary information to file returns.

The IRS account provides taxpayers with information on the taxes owed, tax records, making tax payments, applying for tax payment plans, and signing power of attorney and tax information authorizations.

The agency advised taxpayers to gather and organize their tax records, stating that this would make it “easier to prepare a complete and accurate tax return.” It helps avoid errors that can slow down refunds. Taxpayers may identify overlooked deductions or tax credits during the process.

“Most income is taxable, including unemployment compensation, refund interest, and income from the gig economy and digital assets. Taxpayers should gather Forms W-2, Wage and Tax Statement, Forms 1099-MISC, Miscellaneous Income, and other income documents before filing their return.”

The agency asked people to inform the IRS if they change their address and notify the Social Security Administration if they legally change their name.

Taxpayers should also ensure that their “paychecks have enough tax withheld” as “time [is] running out to make 2023 changes,” the agency said. Withholding tax refers to the tax that an individual’s employer withholds from their paycheck and sends to the IRS on the employee’s behalf.

IRS’ Tax Withholding Estimator tool can help people determine the correct amount of tax that was withheld from their paychecks.

“This tool can be helpful if an earlier tax return resulted in tax owed or a large refund. And for those that have life changes or events such as getting married or divorced or welcoming a child, or for those taking on a second job or managing self-employment income, it can help calculate estimated tax payments.”

Tax Refunds

Regarding tax refunds, the IRS pointed out that the fastest and easiest way to get a refund is through direct deposits. And to get refunds via direct deposit, taxpayers should have filed their returns electronically and chosen “direct deposit” as the way to get refunds.

“Taxpayers can make direct deposits to bank accounts, banking apps and reloadable debit cards, but will need to provide the routing and account information associated with the account.”

Those who request refunds via checks are “much more likely to report an issue getting their refund,” the agency claimed. Such requests can face issues like forgery, non-receipt, theft, and checks returned due to a bad address.

Choosing the direct deposit option for refunds eliminates the possibility that a refund check is lost or gets stolen and returned to the IRS as undeliverable.

The agency usually issues tax refunds within 21 days of receipt of the tax returns. However, the timing of the refunds can be affected due to several factors.

For instance, if the IRS decides that tax returns need additional review due to concerns about fraud or identity theft, the refunds will take a longer time.

Similarly, some returns may require a manual review if the agency’s systems detect a potential error. “Some of these situations require us to correspond with taxpayers, but some do not. This work does require special handling by an IRS employee.”

“So, in these instances, it may take the IRS more than the normal 21 days to issue any related refund. In cases where the IRS is able to correct the return without corresponding, the IRS will send an explanation to the taxpayer.”

Beginning next year, the agency also plans to launch its e-filing program, Direct File, which will allow some taxpayers from 13 states to use the service.

In the pilot-testing phase, only individual tax filers with “relatively simple returns” will be eligible to access the service. Certain types of income, tax credits, and adjustments will be allowed in Direct File for the pilot test.

2023 Tax Brackets

There are seven income tax brackets for the 2023 tax year. The lowest marginal tax is 10 percent, which applies to single filers making up to $11,000 annually or married individuals filing jointly who make up to $22,000 per year.

The highest marginal tax rate is 37 percent, which is applicable to single filers making $578,125 or more in a single year. For married individuals who file jointly, the rate is applicable when the annual income is $693,750 or more.

For individual taxpayers, the deadline for filing and paying their 2023 taxes is April 15, 2024. The penalty for those who fail to file their returns by the deadline is 5 percent per month on unpaid taxes. The penalty will not exceed 25 percent of the unpaid taxes.

In case of failure to pay the taxes on time, the penalty is 0.5 percent of the unpaid taxes per month, which can accrue to a maximum of 25 percent.