To most tax-paying individuals, the tax season is probably the most dreaded time of the year. The majority of law-abiding citizens may even agree that it’s a painstaking task that they would like to put off until the very last hours approaching the income tax return deadline. It’s a race against the clock as individuals must submit their taxes to avoid accruing any tax penalties. Many Americans intentionally postpone preparing and filing their tax returns, particularly knowing that it’s evitable to escape paying their tax debt obligation to the government. No one enjoys writing a large check to the IRS.
Tax Preparation Takes Organization Skills
There are many reasons, some are probably justifiable, that individuals may have when it comes to not filing their income tax returns. Human beings are the best procrastinators specifically when they are presented with an overwhelming and challenging task. The reality is that it takes time, which most people seem to have less of these days. It takes effort, which can be difficult to put forth when individuals are mentally and physically drained. Most of all, it requires organization skills, which most individuals seem to lack in order to succeed at tax preparation.
Failure to File Income Taxes Can Prevent Tax Penalties
Unfortunately, filing income tax returns is not optional and is a major responsibility that is required of all individuals and businesses alike. Satisfying this critical obligation annually will prevent future financial hardships, tax penalties, and any possible IRS audits. Avoidance and failure to file income taxes prior to the deadline will trigger a series of unfortunate events that could have been prevented.
Understanding Form 1099-K
Although submitting your income tax returns for 2023 may seem similar to the previous years, individuals need to pay attention to a new tax law that has been implemented this year. A key focus for 2023 tax preparation is gathering the necessary documents that are required to complete the successful filing of your tax returns. Besides the typical documentation that you have provided annually, taxpayers need to understand and include Form 1099-K with their income tax return submission. A new set of rules apply to the form depending on your own unique set of circumstances.
1099-K Has New Reporting Threshold
In fact, you may have received Form 1099-K in the mail and actually wondered why it was sent to you. This form captures income received from a third-party payment network such as Amazon, PayPal, Square, or Venmo. More specifically, the receipt of the form in the mail indicates that you were paid greater than $600 last year for goods or services. You may even wonder why this is the first time you have seen this new form. There is a simple explanation for this, the IRS updated a new rule stating that third-party payment networks must send a 1099-K to all individuals whose payments surpassed a new $600 reporting threshold.
Avoid Filing an Amended Return
Similar to the Form W-2, companies have a deadline of January 31st to send the Form 1099-K too. Being eager and rushing to file your 2022 income tax returns may prove to be detrimental to you in the long run. Failure to report your 1099-K income to the IRS may result in you being delinquent on your tax obligations. However, you may also need to file an amended return which is both time-consuming and frustrating. Proper tax preparation, tax knowledge, and tax checklists will prevent these simple mistakes from developing into costly ones.
Submit All Required Tax Forms with Your Income Tax Returns
Recognizing that it is your responsibility to supply all the required tax forms with your income tax return will ensure that it is accepted by the IRS without any issues. Since reporting companies are directly sending your income information to the IRS, your information must match the documents that the IRS received. Any inaccurate information will be captured by the IRS. Thus, this action can potentially trigger an IRS audit along with monetary penalties being imposed. Kudos to the procrastinators, it paid this year to put off filing your income tax returns and waiting until the very last minute.
Start Fresh Tax Relief Can Help You File Your Income Tax Returns
If you are struggling with filing your income tax returns because of the knowledge that you lack, please call our professional tax team at Start Fresh Tax Relief today. We offer professional income tax preparation that will ensure your income tax return is accurate and submitted properly to the IRS. If you feel overwhelmed and stressed, our staff will partner with you in resolving your tax obligations. Do not procrastinate and delay your life from getting back on the right track. Remember, unfiled tax returns will eventually catch up to you. The IRS will assess harsh penalties for your negligence and failure to honor your responsibility. Take the first step now in resolving your tax issues.