Tuesday marked the last day to file your taxes for 2022, but it’s not too early to get your taxes in order for 2023.
Although you won’t be able to file your 2023 taxes for another nine months, the IRS said filers can use their tools to avoid a surprise tax bill.
The IRS said it recommends taxpayers use its tax withholding estimator. The agency said it “can help people adjust how much is withheld and could put more cash in their pocket or help them avoid a tax bill for 2023.”
The IRS said that if too little is withheld from earnings, it can lead to penalties in addition to paying additional taxes during tax season.
“Income taxes must generally be paid as taxpayers earn or receive income throughout the year, through either withholding or estimated tax payments,” the IRS said. “If the amount of income tax withheld from one's salary or pension is not enough, or if they receive other types of income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, they may need to make estimated tax payments.”
Are you among 1.5 million Americans owed a 2019 tax refund?
The IRS estimates that of the 1.5 million people who are owed a 2019 tax refund, half would get over $893.
One way to increase withholdings is to file a W-4 form with employers to request additional taxes to be withheld throughout the year. This can also lead to larger refunds during tax season.
The IRS also reminded taxpayers that income received through third-party apps, like Venmo and PayPal, is taxable and starting this year, they may receive a 1099 form from these apps.
