Filing for tax years 2020 and 2021 was complicated and filled with last-minute changes, new laws and pandemic-related benefits. There’s much less drama for tax year 2022 — but some of those benefits you may have enjoyed last year have gone away.
For example, the $600 charitable deduction for couples who don’t itemize is gone and the larger break for child and dependent care expenses has reverted back to its usual level. Tax filing is also less complicated because there were no stimulus payments in 2022, which means you can’t just use last year’s tax return as a guide for filing your 2022 return.
Here’s what you need to know about filing your taxes for 2022 and making the most of your benefits:
How Does Filing Taxes Work?
There are several ways to file your taxes. You can do them yourself, use tax software or an online program, visit a tax preparer in person or virtually, or get help from a certified public accountant or enrolled agent. There are many levels of support — and associated costs — depending on your situation’s complexity.
You may be able to file your taxes for free through IRS Free File — a program in which online tax prep companies partner with the IRS to offer their services for free — if your income was $73,000 or less in 2022. For more information, visit the IRS website.
You may also be able to get free tax prep help through the IRS Volunteer Tax Assistance and Tax Counseling for the Elderly programs if you qualify. Check the IRS database to find out if these resources are available in your area.
Some tax software companies offer free programs that aren’t based on income. For example, from now through March 31, 2023, if you have a simple tax return you can use TurboTax Free Edition and get help — plus a final review — from a tax expert through TurboTax Live Assisted Basic.
To qualify for the free service, you must have a simple tax return including Form 1040 only, W-2 interest and dividend income, standard deduction, earned income tax credit, child tax credit and student loan interest, Lisa Greene-Lewis, CPA and tax expert with TurboTax, says.
TurboTax also offers several other levels of tax-filing software, such as TurboTax Premier, which provides guidance for investments like stocks, cryptocurrency and rental property, and TurboTax Self-Employed, which can help you file and find extra tax deductions for your business. In addition, you can simply hand over your taxes to a TurboTax Live Full Service tax expert.
H&R Block’s tax preparers work in person and virtually. Services generally start at $85 if you want a preparer to handle your taxes, plus more depending on how complex they are. H&R Block also offers several levels of do-it-yourself online tax preparation, with prices starting at $0 for simple returns.
Jackson Hewitt Tax Services offers virtual and in-person tax filing, and it has nearly 3,000 locations in Walmart stores. Prices vary by location, but they start at $65 in Walmart stores for federal tax returns. Jackson Hewitt’s online DIY platform costs $25 for your federal and state returns.
You can also find a licensed tax preparer, CPA or enrolled agent on your own. Enrolled agents are federally licensed tax preparers who are authorized to represent taxpayers in front of the IRS. You can find one through the National Association of Enrolled Agents website.
CPAs must complete rigorous education, testing and continuing education requirements. You can find one near you through the American Institute of CPAs “Find a CPA” tool. CPAs who have their personal financial specialist credentials also have expertise putting taxes into a financial planning perspective.
“A qualified tax and financial advisor may offer more than just short-term tax advice,” Michael Trank, CPA and accredited personal financial specialist in Irvine, California, says.
“They may address holistic issues such as preparation for retirement, planning and saving for important goals, maintaining retirement lifestyle, and estate planning objectives with consideration for family dynamics, tax efficiencies and risk tolerances,” he says.
All paid tax preparers must have a preparer tax identification number, which they have to include when they sign your tax return. You can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to make sure your preparer has the correct qualifications.
When Can You File Your Taxes?
The IRS began accepting tax year 2022 returns on Jan. 23, 2023. You should wait until you receive your forms to file, such as your W-2 from your employer and any Form 1099s reporting earnings from other sources like interest, dividends, self-employment and unemployment compensation. You must send most of these forms by Jan. 31, although brokerage firms have until Feb. 15 to send some 1099s.
You typically receive 1099s through the mail, or you may be able to find them online by logging into your account. If you work with an online tax-filing service like TurboTax, you may be able to automatically import your W-2s and 1099s directly from your payroll provider or financial institution.
When Are Taxes Due?
Federal income taxes are due on April 18, 2023, because April 15 and 16 are weekend days and April 17 is the Emancipation Day holiday in Washington, D.C. State income taxes may have different deadlines — for example, Virginia state tax returns are generally due May 1.
People who live in areas affected by natural disasters may have later deadlines. For instance, the IRS extended the tax-filing deadline to May 15, 2023, for taxpayers in California counties that were declared a federal disaster area because of severe storms and flooding at the beginning of the year. See the IRS list of disaster situations for areas that qualify for tax relief or extended deadlines.
The earlier you file, the sooner you can get your refund — and the less likely an identity thief will claim it before you do. Most people who file electronically and choose direct deposit receive their refunds within 21 days of filing.
Because of a law aimed to prevent fraud, however, the IRS cannot issue refunds that include the EIC or additional CTC before mid-February. Most early filers with those credits should expect to receive their refunds by Feb. 28 if they filed electronically, chose direct deposit and had no issues with their tax returns.
You’ll usually get your refund fastest if you file electronically and have the IRS deposit it directly into your bank account. You can check the status of your refund after you file by using the IRS “Where’s My Refund?” tool.
The IRS says to avoid delays in processing, people should file electronically whenever possible.
What if I Miss the Filing Deadline?
If you miss the filing deadline, it depends on whether or not you owe money. If you don’t owe money, there’s no penalty for missing the deadline — but you need to file a return to get your refund.
“There’s technically no penalty,” Steven Hamilton, enrolled agent with Hamilton Tax and Accounting in Grayslake, Illinois, says. “But you have to file within three years of the due date on the return or you lose out on your refund.”
The situation is very different if you owe the IRS. In that case, you could face two penalties.
“The penalty for not filing a tax return is potentially 10 times greater per month than the penalty for not paying in full,” Brittany Benson, senior tax research analyst at the Tax Institute at H&R Block, says.
The late-filing penalty is up to 5% of the unpaid balance each month (up to a maximum of 25%), and the monthly penalty for failure to pay on time is 0.5% of the unpaid taxes.
“For example, for someone who owes $1,000, the failure-to-pay penalty starts at $5 per month but the penalty for failing to file a return starts at $50 per month,” she says.
How Do I Get a Tax Extension?
If you can’t make the April 18 deadline, you can file IRS Form 4868 for an extension, which will push your tax-filing deadline forward to Oct. 16, 2023.
Some file an extension because they run out of time to gather their tax records or they’re waiting to receive some tax forms.
“Some people routinely file for an extension because they’re waiting for a Schedule K-1 from a partnership, S corporation or trust,” Mary Kay Foss, CPA in Walnut Creek, California, says.
“Whoever is responsible for providing the Schedule K-1 should give them an estimate of the income to be reported in enough time so the extension payment can be calculated,” she says.
Although you can receive an extension to file, the money you owe is still due by the April 18, 2023, deadline.
“A lot of people think an extension is an extension to pay as well, but it’s only an extension to file,” Greene-Lewis says. “At least pay 90% of what you owe by April 18 to avoid any penalties.”
If you can’t pay the full amount, try to file and pay what you can, then work with the IRS to make an installment agreement, she says.
How Much Do I Have to Make to File Taxes?
You generally have to file a federal income tax return if your gross income exceeds the standard deduction.
For tax year 2022, the standard deduction is $12,950 for single filers, $19,400 for head of household and $25,900 for married filing jointly. Taxpayers 65 and older can claim an extra $1,400 or $1,750 deduction if they use the single or head of household filing status, respectively.
Dependents must generally file a return if they have unearned income of more than $1,150 or earned income of more than $12,950, Benson says. They also must file if they have gross income of more than $1,150 or earned income of up to $12,550 plus $400. Note that your state may have different filing requirements.
You may still want to file an income tax return even if you don’t have to. For example, you could get a refund if your employer withheld taxes from your paychecks or you could qualify for the EIC even if you earned less than the filing requirement.
“The IRS reports that they have over $1 billion in unclaimed refunds every year,” Greene-Lewis says. “The average (unclaimed) refund owed is for over $800, and it doesn’t hurt to file.”
You have up to three years after the filing deadline to file a return and get a refund.
Filing an income tax return also starts the clock ticking on the statute of limitations for the IRS to initiate an audit, which is generally three years from the tax-filing deadline or, if later, three years from the date you filed your return.
“If you don’t file a tax return, the statute of limitations doesn’t start,” Hamilton says.
How Do I Get Help With a Tax Audit?
If you worked with an enrolled agent or CPA, let them know about the audit — they should be able to help and can represent you in front of the IRS. If you filed your return through a tax preparer or software service, they may be able to help, too.
Enrolled agents often specialize in audits and complex tax-filing situations.
“We have 25 to 50 audit cases open at any time, and they’re referred to use throughout the year,” Hamilton says. “If you’re audited, reach out to an accountant — you have a right to representation.”
How Long Should I Keep Tax Records?
“People should keep the returns themselves forever,” Foss says. “The supporting records can be shredded earlier.”
Many tax experts recommend keeping your tax returns (or digital copies) for an unlimited amount of time. They can be helpful if you apply for a mortgage or disability insurance, need to prove your income for your Social Security record or show how much you’ve made in tax-deductible contributions to your retirement savings through the years.
You need to keep your supporting documents for at least three years after the tax-filing deadline, which is the length of time the IRS generally has to initiate an audit. That time frame rises to six years if you omit 25% or more of your income, which may be more likely to happen if you have self-employment income from several sources.
“I usually recommend that people keep the supporting documents for seven years after filing,” Foss says. And you need to keep some records for longer. “Records related to the purchase or improvement of an asset like a personal residence or marketable security should be kept until seven years after the asset is sold,” she says.
Note that some states have a different time frame for initiating an audit.
[Read: 15 Self-Employment Tax Deductions.]
How Should I Pay My Taxes?
If you owe the IRS money, you have several options. You can write a check, pay directly from your bank account, or use a credit or debit card. If you can’t pay the full amount by the deadline, you can apply for an installment agreement.
“If a taxpayer cannot pay their federal tax liability by the due date but can pay within 120 days or less, they may request a short-term payment plan online or by phone,” Trank says. “There is no setup fee, but interest and penalties will be charged on unpaid balances until paid.”
If the taxpayer needs more than 120 days, they can request an installment plan either online or by filing a Form 9465 Installment Agreement Request. There is a one-time setup fee that costs from $31 to $225 — depending on whether you apply online, by phone or mail and how you plan on paying the tax, Trank says. Low-income taxpayers may be able to get a fee waiver.
When Are State Taxes Due?
Most states also collect income taxes. State income tax returns are generally due by April 18, 2023, although some states have different deadlines. Check with your state’s department of revenue for details.
You may be eligible for Free File for your state income taxes based on your income — or, you can use software or a CPA, enrolled agent or tax preparer to do them.
Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming don’t have individual income taxes. New Hampshire has no individual income tax but it does tax some dividend and interest income.
What Happens if I Forgot to Take a Deduction When I Filed?
You generally have up to three years from the tax-filing deadline to file an amended return if you left something out or realize you made a mistake. File Form 1040X with the changes and submit any additional forms affected by the change. If you claim additional deductions or credits, you can get an extra refund.
If you discover an error before the filing due date, you should file a superseding tax return before the due date, Trank says.
[Read: Tax Write-Offs You Shouldn’t Overlook.]
Common Tax Terms to Know
Standard deduction. The standard deduction is the amount that you can deduct regardless of your expenses. For 2022, the standard deduction for those under 65 is $12,950 for single filers, $19,400 for head of household and $25,900 for married filing jointly. Taxpayers 65 and older can claim an extra $1,400 or $1,750 deduction if using the single or head of household filing status, respectively.
Itemized deductions. These deductions are based on certain expenses like charitable contributions, mortgage interest, state and local taxes (up to $10,000 per year) and medical expenses that are more than 7.5% of your adjusted gross income. If your itemized deductions add up to more than your standard deduction, you must file a Schedule A to report them instead of taking the standard deduction.
Tax deduction: A tax deduction reduces your taxable income. For example, you may be able to deduct contributions to a traditional IRA, health savings account or, if you’re self-employed, a simplified employee pension individual retirement account or Solo 401(k).
Tax credit: A tax credit simply reduces your tax liability. A $300 credit, for example, can reduce your liability by $300. A nonrefundable tax credit can provide a refund only up to the amount you owe. A refundable tax credit provides a refund even if it’s more than you owe. Some common tax credits include the American opportunity tax credit and lifetime learning credit (for education expenses), CTC, child and dependent care credit and retirement savings contributions credit.
Withholding: This usually refers to the amount of money employers take out of employees’ paychecks to cover federal income taxes, state taxes and other obligations. You can also have taxes withheld from a pension and unemployment or Social Security benefits.
W-4: This is the IRS form you submit to let your employer know how much money to withhold from your paycheck for taxes. It’s a good idea to run your numbers through the IRS withholding estimator and adjust your W-4 with your employer so you don’t have a large bill due at tax time. If you received a large refund, adjusting your W-4 to reduce your withholding could help you get more money in your paychecks instead.
W-2: This form reports to the IRS your annual wages and the amount of taxes withheld from your paychecks for federal and state income taxes.
1099: This form reports other kinds of income like self-employed or freelance earnings, dividends, and interest and unemployment benefits.
Schedule C: This is the tax form you typically need to file if you have income from self-employment. You can use it to report your income and deduct business expenses.
Tax return: A tax return is the form you file that outlines your income, expenses, deductions, credits and other tax-related information to the IRS or your state’s department of revenue.
Tax refund: This is the money returned to you when your tax liability is less than the amount you paid through the year, either through withholding or estimated taxes.
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What to Know About Filing Taxes originally appeared on usnews.com
Update 01/26/23: This story was published at an earlier date and has been updated with new information.
Correction 01/31/23: A previous version of this article misstated the requirements to qualify for the TurboTax Free Edition.
