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Personal Income Tax

Personal income tax is for individuals, a tax paid on the money they earn!

We are approved and qualified by the IRS to e-file!

When you keep your tax records organized, it will lead you to a complete and accurate tax return preparation, making the process of filing much easier. It will also help you avoid errors that can lead to processing delays, slowing the time of your refund and avoid overlooked deductions or credits. Remember that all income, including from part-time work, side jobs or the sale of goods is taxable.

The deadline to file the 2022 (January 1 – December 31, 2022) federal income tax return is April 18th, 2023. If you own taxes, make sure you do not pass this date, or you can face penalties and interest. You need to timely file an extension if you missed the deadline. Also, keep in mind that if you file an extension, it does not give you more time to pay, it gives you more time to file. Payment is due by April 18th.

When you are ready to file, the complete tax records to take to your tax preparer must include:

Federal Income Tax Deadline 2023
^April18th
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Forms W-2 from your employer(s).

Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, pension, annuity, or retirement plan distributions.

Form 1099-K, 1099-MISC, W-2 or other income statement if you worked in the gig economy.

Form 1099-INT if you were paid interest.

Other income documents and records of digital asset transactions.

Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance payments or claims Premium Tax Credits for 2022 Marketplace coverage.

IRS or other agency letters.

CP01A Notice with your new Identity Protection PIN.

Remember that you should notify the IRS if you change your address and the Social Security Administration of any legal name changes.

Important Tax Credits to Consider

For 2022, the following are the amounts established for the following credits:

Child Tax Credit (CTC): Those who got $3,600 per dependent in 2021 for the CTC will, if eligible, get $2,000 for the 2022 tax year.
Earned Income Tax Credit (EITC): For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will now get $500 in 2022.
Child and Dependent Care Credit: The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.

E-File

When you file electronically, the IRS receives the filed tax returns within 24 hours, while paper tax returns take several weeks sometimes months to be processed. The best option is always to:

File electronically.
Choose Direct Deposit for your tax refund – it’s the fastest and safest way to receive your money. If you file a paper return, you can still choose direct deposit.

Did you know?

During tax season 2022, The IRS started accepting and processing tax returns on Monday, Jan. 24, 2022
During tax season 2021, The IRS started accepting and processing tax returns on Friday, February 12, 2021

It is expected that the IRS starts accepting and processing tax returns around January 20th, 2023. There is no announcement yet from the IRS.

How Credits and Deductions Work

It’s important to determine your eligibility for tax deductions and tax credits before you file.

Deductions can reduce the amount of your income before you calculate the tax you owe.
Credits can reduce the amount of tax you owe or increase your tax refund.
Certain credits may give you a refund even if you don’t owe any tax.

Refund delays and timing

Different factors can affect the timing of a refund after the IRS accepts a return. When electronic filing the IRS issues most refunds in less than 21 days, but some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information or there is suspected identity theft or fraud.

Also, the IRS cannot issue refunds for people claiming the EITC or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with EITC or ACTC.

When contacting the IRS to check for the status of your refund, have the following information on hand: Social Security or taxpayer ID number, know your filing status and the exact refund amount on your return, you can also download the IRS2go app.

To safeguard your identity and avoid misuse of your SSN, it is strongly suggested that you apply for the Identity Protection PIN program with the IRS. The IP pin is a 6-digit number assigned to taxpayers each year.

Questions?

What to do if the information reported on the 1099 is incorrect?
If the information is incorrect on the 1099-K, taxpayers should contact the payer immediately, whose name appears in the upper left corner on the form. The IRS cannot correct it.
When will I receive form 1099?
Taxpayers should receive Form 1099-K, Payment Card and Third Party Network Transactions, by January 31, 2023.
What is the maximum Minimum amount received that will generate a 1099?

If you received payment for goods and services rendered that exceeded $600 including third party payments in tax year 2022.
Is all income taxable?

All income, including from part-time work, side jobs or the sale of goods is taxable. Taxpayers must report all income on their tax return unless it’s excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Nonemployee Compensation, or any other information return.
What are the third-party Networks Reporting Requirements?

Prior to 2022, Form 1099-K was issued for third party networks transactions only if the total number of transactions exceeded 200 for the year and amount of these transactions exceeded $20,000. The reporting threshold was lowered in 2021. Now a single transaction exceeding $600 can require the third-party platform to issue a 1099-K.
Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.
Keep in mind that If the information is incorrect on the 1099-K, you should contact the payer immediately, whose name appears in the upper left corner on the form.
Need to amend your tax return?

You can amend your state tax return by filling form 1040-X and if applicable (depending on the state), get the correct form from your State and fill it out using the information from the form 1040-X
Individual Tax Identification Number ITIN

If you are not eligible to obtain a Social Security Number and need to file a federal Tax Return, the will IRS issues an Individual Tax Identification Number also knows an ITIN, a nine-digit tax processing number. If ITIN was not used to file a federal tax return at least once for tax years 2019, 2020 and 2021, the ITIN will expire on December 31, 2022.
Reasons to Get an Individual Taxpayer Identification Number (ITIN)
1. Be able to file taxes with the IRS.
2. Refunds are available for ITIN filers, and you can qualify for tax credits for your children
3. You can open a personal checking account and start building your credit
4. You can purchase affordable health insurance for your children
5. Filing your taxes is a plus when gaining legal status

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