The Start of Tax Filing Season: What You Need to Know

The 2023 tax filing season officially began on Monday, January 23, as the U.S. Internal Revenue Service (IRS) started accepting completed tax forms. This marks the beginning of a period during which millions of Americans will submit their tax returns, with a deadline of April 15. The IRS has announced that it expects more than 140 million individual tax returns to be filed by this deadline, underscoring the scale of this annual process. For those eager to receive their refunds, the IRS has assured taxpayers that refunds are typically processed and issued within 21 days. However, those opting for paper returns should be prepared for a longer turnaround time, often exceeding four weeks.

How and When to File Your Taxes

Taxpayers have the flexibility to file their returns anytime between January 23 and the final deadline of April 15. The IRS encourages individuals to file electronically, as this method is faster, more efficient, and less prone to errors compared to paper filing. Additionally, the IRS has expanded its Direct File system, a program that allows taxpayers to file their taxes directly with the agency, bypassing intermediary firms that often charge fees. This initiative, which was previously available in 12 states, has now been expanded to 25 states, including Alaska, Connecticut, Idaho, Illinois, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin.

The Expansion of Direct File: Simplifying the Tax Filing Process

The Direct File program is designed to simplify the tax filing process by enabling taxpayers to submit their returns directly to the IRS. This eliminates the need for third-party platforms that may charge additional fees, making the process more accessible and cost-effective. For the first time, the Direct File program will feature a “data-import tool” that allows users to automatically import information from their IRS account, streamlining the process even further. This tool is compatible with mobile phones, laptops, tablets, and desktop computers, ensuring that taxpayers can file their returns from the comfort of their own homes, or even on the go.

The Importance of Filing on Time: Penalties and Extensions

While the IRS offers a six-month extension for taxpayers who need more time to file their returns, it’s important to remember that this extension Only applies to the filing deadline, not the payment of taxes owed. Those who fail to file their taxes by the April 15 deadline without requesting an extension risk facing penalties. The penalty for late filing is 5% of the taxes owed for each month the return is late, up to a maximum of 25%. The IRS will typically mail a letter or notice to inform taxpayers of any late fees or penalties, making it crucial to address these issues promptly to avoid further complications.

Last-Minute Filing: A Common Phenomenon

Despite the availability of resources and tools to facilitate timely filing, a significant portion of Americans tend to wait until the last minute to submit their tax returns. According to a 2021 survey by IPX 1031, up to one in three taxpayers delays filing until the final days leading up to the deadline. This procrastination can lead to errors, missed deductions, and increased stress. To avoid these pitfalls, it’s advisable to start gathering necessary documents and reviewing tax-related information well in advance of the April 15 deadline.

Key Takeaways: Navigating the 2023 Tax Filing Season

As the 2023 tax filing season gets underway, it’s essential for taxpayers to stay informed and proactive. The IRS has taken steps to make the process more accessible, particularly through the expansion of the Direct File program and the introduction of Its new data-import tool. Taxpayers should also be mindful of the April 15 deadline and the potential consequences of late filing, including penalties and accrued interest. By planning ahead, taking advantage of available resources, and staying organized, Americans can navigate the tax filing process with confidence and efficiency. Whether you choose to file electronically or use the Direct File system, the key is to ensure that your return is accurate, complete, and submitted on time.