In our last blog we talked about the importance of gathering some key documents in advance of your tax appointment. For this post, we wanted to expand upon that list.
Direct deposit information
According to the IRS, the fastest way to get a tax refund is by filing electronically and choosing direct deposit. Direct deposit is faster than waiting for a paper check in the mail. It also avoids the possibility that a refund check could be lost, stolen or returned to the IRS as undeliverable.
Refine (or develop) your recordkeeping system
The IRS also suggests that taxpayers should develop an electronic (or paper) recordkeeping system −that keeps important information in one place. (If you didn’t have a recordkeeping system for your 2022 tax documents, now is an ideal time to set one up for 2023.)
(If you do decide to maintain a paper recordkeeping system, keep in mind that stuffing all of your receipts into a cardboard box is a start, but organizing your receipts by category is a lot better. Not only will this help you be more organized, it means your accountant won’t need to spend hours sorting all of your documents when you have your tax appointment.)
Your records should include all year-end income documents, such as W-2 forms from employers, 1099 forms from banks or other payers, 1099-K forms from third party payment networks, 1099-NEC forms for non employee compensation, 1099-MISC forms for miscellaneous income, and/or 1099-INT forms if you were paid interest. You’ll also want to keep records for all digital asset transactions.
Ensuring your tax records are complete before you sit down with an accountant helps taxpayers avoid errors that lead to processing delays. When you have all their documentation in order, you’ll help ensure that your CPA files an accurate return that will allow you to avoid processing delays, refund delays, and/or IRS letters.
Set up an IP PIN
Lastly, the IRS is urging taxpayers to get extra protection by setting up an Identity Protection Personal Identification Number (IP PIN). Anyone who has a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) and is able to verify their identity is eligible to enroll in the IP PIN program. The fastest and easiest way to receive an IP PIN is by using the Get an IP PIN tool, which will be available this month.
The purpose of the IP PIN (which is a 6-digit # assigned to eligible taxpayers) is to help prevent others from filing a false tax return using their SSN. The IP PIN is known only to the taxpayer and the IRS. Initially designed for confirmed victims of tax-related identity theft, the IP PIN program was expanded in 2021 to include any taxpayer nationwide who wants the additional protection and security of using an IP PIN to file tax returns with the IRS.
Do you need help filing your 2022 taxes? We can help. Call our office today to get something on the books.