Taxpayers should only prepare their tax return when they have all their required tax documents. The IRS has not yet published the beginning and the end of the 2023 tax season. The returns cannot be sent to the IRS before the official start date of the tax season. Taxpayers who receive early payments for their tax refund get a high interest loan through their tax preparer. By tax law, taxpayers with children whose refund amount is in large part comes from the earned income credit (EIC) or other refundable credits usually receive their refund from the IRS around the end of February. Further, as the laws require, most tax documents are due by January 31, 2022. After that date, taxpayers could inquire from the institutions that they transacted business with during the 2022 tax year to find out when they will receive their tax documents.

A Checklist To Consider For Your Tax Return Filing

Personal information

  • Last year income tax return if you are a new client   
  • Name, address, Social Security Number and Date of Birth for yourself, spouse and dependents
  • PIN Number from the IRS of any individual in the return who was previously a victim of identity theft
  • Dependent Provider, Name, Address, Tax ID or Social Security Number
  • Banking information if Direct Deposit Requested
  • Copy of Social Security Card of individuals in the tax return
  • Copy of driver license of taxpayers
  • Birth certificates for children or other documents that show taxpayers are eligible to claim the dependent

Income Data Required

  • Wages and/or Unemployment (W2s, K1s, 1099s, others)
  • Interest and/or Dividend Income
  • State/Local income tax refund
  • Social Assistance Income
  • Pension/Annuity/Stock or Bond Sales
  • Contract/Partnership/Trust/Estate Income
  • Gambling/Lottery Winnings and Losses/Prizes/Bonus
  • Rental Income
  • Self Employment/Tips
  • Foreign Income

Expense Data Required

  • Dependent Care Costs
  • Education/Tuition Costs/Materials Purchased
  • Medical/Dental
  • Mortgage/Home Equity Loan Interest/Mortgage Insurance
  • Gambling/Lottery Expenses
  • Real Estate Taxes
  • Estimated Tax Payments to Federal and State Government and Dates Paid
  • Home Property Taxes
  • Charitable Contributions Cash/Non-Cash
  • Purchase qualifying for Residential Energy Credit
  • IRA Contributions/Retirement Contributions
  • Home Purchase and Sale
  • Moving Expenses for military members

A tax preparer is hired to prepare the tax return of the clients. The said preparer could not legally promise a taxpayer a lot of money or big refund. The preparer could not promise a specific amount of earned income tax credit (EITC) because each taxpayer financial situation is different. Alimony, unemployment compensation, child support payments cannot be used to increase the EITC because these payments are not earned income. The preparer should apply the tax laws to each client’s case. The client should request an explanation as to how the preparer gets to the refund amount before signing the tax return, especially when the client financial situation remained unchanged and no prior history of big refund. The client must inquire about any questionable amount. 

The fee that taxpayers pay to prepare the tax return should be based on the amount of work, time, complexity, the number of schedules and forms that the return requires, and the education and experience of the tax preparer or professional.

It is against the rule of IRS circular 230 section 10.27 for tax preparers to charge a contingent fee based on the amount of a taxpayer refund amount.

Be Aware!

  • Getting a big refund does not necessarily mean that your tax return is legally and accurately done. You are personally liable for everything on your tax return. If you are married, you are jointly and severally liable for anything on your joint return. If you have more than one statement of income (W2, K1, 1099, etc.), make sure that all items of income are accounted for.
  • Make sure there is not a Schedule C attached to your return if you do not receive payments from other sources as self employed. Many taxpayers are being audited because a Schedule C was attached to their Form 1040 to either increase their taxable income or to lower their taxable income.
  • Ensure that there are no education credits claimed on your return if you did not attend a qualified educational institution during the past tax year. There are two education tax credits available to help qualified taxpayers: the American opportunity tax credit and the lifetime learning credit.
  • Take some time to review line 1 (Wages), line 8 (Other Income), line 9 (Total Income), line 12 (Standard Deduction or Itemized Deductions, line 34 (Refund). Ask questions! This exercise could save many taxpayers a lot of money and could protect them from audit!
  • Make sure the tax return preparer information and signature are at the lower bottom of the second page of Form 1040 because you could not attempt to hold the preparer liable in the case of an audit if he or she did not sign the return.
  • Don’t inflate your expenses on your tax return as a business owner. Reporting consecutive big losses or expenses are red flags. Inflated expenses could trigger an audit by the IRS. They could certainly disqualify you for a mortgage, a line of credit, or in cases you have to show proof of income for certain transactions.
  • Ensure that you file the proper tax forms for yourself or your business.
  • Making the maximum contribution in a qualified retirement plan reduces your taxable income. Self employed and small businesses are qualified for higher contribution. Taxpayers could contribute to their IRA account until the filing deadline of their tax return.
  • A self employed taxpayer or business owner who did not pay quarterly estimated taxes might owe a penalty.

  Hiring a tax resolution expert is the best action a taxpayer could take in a tax matter before the IRS or a state tax authority. 

We offer FREE initial consultation!!!

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