2022 tax preparation and filing: Are you ready?

Tax preparation

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Credit Sesame on tax preparation for 2022.

Tax preparation is the annual chore that almost everybody hates. It is no surprise that many of us put it off until the last minute. But 2023’s filing deadline is April 18, which is looming large. What can you do if you’re not ready?

Are you due a tax preparation extension?

If you live in an area that’s been affected by a natural disaster, you may be entitled to delay filing your return by months. For example, those affected by such FEMA-designated events in Alabama, California and Georgia have their filing deadlines extended to Oct. 16. Victims in Mississippi get until Jul. 31 while those in New York can file as late as May 15. Visit this IRS webpage for the full list and more details.

Alternatively, you can apply for a general extension. This gives you extra time (until Oct. 16) for tax preparation. But it does not give you extra time to pay the taxes you owe. You must estimate those and pay them in time for the Apr. 18 deadline. Otherwise, you might incur penalties and interest charges.

Sprint for the line

Extensions are fine but they just postpone the inevitable. You might prefer to lace up your running shoes and make a sprint for the line.

The good news is that there’s help available. The IRS has hired 5,000 more people to support taxpayers through its call centers. But even that number may not be enough to handle call volumes at this time of year. So start with the IRS’s website, which is regularly updated with helpful advice.

Even if you don’t use a reputable tax professional, you stand a good chance of being able to file by yourself.

Use the IRS’s free software for your tax preparation

If your adjusted gross income is below $73,000, you can use the IRS’s free Guided Tax Preparation online service. You answer a series of simple questions and the app does the math. It may even help with your state taxes.

If you earn too much for that free app, the IRS can still help with its Free Fillable Forms service. You download a PDF guide but you don’t get active guidance. You fill in the standard IRS forms online, allowing you to create a paper filing or to file online. Unfortunately, this does not help with state taxes.

If your affairs are complicated, the private sector can help. Use one of the paid-for tax preparation apps that are downloadable or ask a reputable tax professional to do the work for you. Just take care when choosing one.

Special free help for the elderly and disadvantaged

The IRS has two programs that can help those most likely to struggle with tax preparation, Tax Counseling for the Elderly (TCE) and Volunteer Income Tax Assistance (VITA). IRS partners provide these free services, which are often not-for-profits, across the country and one-on-one assistance is on hand from volunteers who are or were tax professionals.

The volunteers have met or exceeded the IRS’s standards for tax law training. They are bound by the same rules of confidentiality as any tax professional. The IRS says, “Each filing season, tens of thousands of dedicated VITA/TCE volunteers prepare millions of federal and state returns.”

Eligibility and finding your local service

You are eligible for TCE if you are 60 years or older. And it will likely be delivered by the American Association of Retired Persons (AARP) Foundation’s Tax-Aide program. To find your nearest AARP TCE Tax-Aide center between January and April use the AARP Site Locator Tool or call 888-227-7669.

Individuals eligible for help under the VITA program must:

  • Earn under $60,000 annually (adjusted gross income, AGI)
  • Or have a disability OR
  • Or have limited English-language skills

Use the VITA Locator Tool or call 800-906-9887 to find your nearest service.

The standard deduction shortcut

The standard imaginary depiction of tax preparation is of somebody hunched over a dining table trying to sort through boxes of receipts as they struggle to itemize their deductions. But things have moved on since then.

In the 2019 tax year, a whopping 87.3% of taxpayers claimed the standard deduction, making wading through a year’s worth of receipts to itemize deductions unnecessary. Why the change? Because the standard deduction is much more generous now than it once was.

In the 2022 tax year (filing now), the standard deductions are:

  • $25,900 married couples filing jointly
  • $12,950 single taxpayers and married individuals filing separately
  • $19,400 heads of households

If your itemized deductions do not add up to the sum in that list that applies to you, there’s no point in itemizing. Indeed, if you stand to save only a small sum by itemizing, you may decide to forego that amount to avoid the headache, especially if you are late preparing your taxes.

Preparing for tax preparation

Before you complete and file your tax return, you must pull together a small pile of documents. These include:

  • Last year’s tax return for your adjusted gross income
  • Your Social Security number and the ones for your spouse and any dependents who need one and who appear on your return
  • Paperwork showing any Social Security benefits and unemployment compensation you received during the year
  • Income receipts from rental, real estate, royalties, partnerships, S corporation and trusts
  • W-2 forms from all employers showing your annual wages
  • Form 1099-INT showing interest you’ve received during the period
  • Refunds, credits or offsets received for state and local taxes (Form 1099-G)
  • Dividends and distributions received from retirement and other plans (Form 1099-DIV or Form 1099-R)

If you are an Affordable Care Act (ACA) filer, you also need Form 1095-A, your health insurance marketplace statement, and possibly Form 8962 if you claim a premium tax credit.

That may sound like a lot of paperwork, but many taxpayers have uncomplicated finances and do not need all the forms. Whatever the requirements, do not delay if you have not yet started tax preparation for 2022.

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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

Peter Warden
Peter Warden has been writing for 14 years about personal finance, credit cards, mortgages and insurance. His work has appeared across a wide range of media, and he is an editor at The Mortgage Reports. He lives in a small town with his partner of 30 years.

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