As the tax season commences on January 27, 2024, millions of Americans are poised to file their returns with the hope of receiving a refund. This year, nearly 40% of taxpayers are anticipated to depend on their refunds to manage routine expenses, a sentiment reflected in a recent Credit Karma survey that queried 1,000 adults during the end of December and beginning of January. With the IRS projecting over 140 million individual tax returns to be submitted by the April 15 federal deadline, it is vital for filers to be well-prepared and informed about the tax filing landscape.
Financial experts emphasize that there are multiple avenues for taxpayers eager to file their returns without incurring costs. Particularly noteworthy is the IRS’s Direct File program, which has the potential to support over 30 million taxpayers this season, as highlighted by the U.S. Department of the Treasury. This initiative has notably expanded to accommodate 25 states, ensuring coverage for a broader array of tax situations compared to the previous year. Former IRS Commissioner Danny Werfel underscored this enhancement, indicating a concerted effort to simplify the filing process for taxpayers.
In addition to Direct File, taxpayers earning an adjusted gross income (AGI) of $84,000 or less in 2024 can utilize the IRS Free File system. This service provides free access to guided tax preparation software, which approximately 70% of taxpayers are qualified to use. Despite this, a staggering number of eligible filers often overlook this resource, as pointed out by Tim Hugo, the executive director of the Free File Alliance. Furthermore, for individuals who may need more personalized assistance, Volunteer Income Tax Assistance (VITA) offers free support to those with an AGI of $67,000 or less, ensuring that help is available for those who need it most.
While the general consensus is to meet the April 15 deadline, it’s important to recognize that particular taxpayer groups, such as those affected by recent California wildfires, may qualify for extended deadlines. This flexibility is part of a broader IRS initiative to provide tax relief for victims of federally declared natural disasters, which Congress extended in December. Such measures can lead to considerable financial advantages, allowing impacted taxpayers to claim additional deductions on losses incurred.
In the rush to file taxes, it can be tempting to rush through the process. However, certified public accountant Brian Long, a senior tax advisor at Wealth Enhancement, cautions against this hasty approach. It is crucial to ensure that all necessary tax documents are compiled before submission. Inaccurate or incomplete information can trigger alerts in the IRS systems, leading to delays and complications in processing returns. To mitigate this, Long recommends using a prior-year tax return as a comprehensive checklist to guarantee that all crucial details are captured accurately.
Tax forms generally start to arrive in January, but filers should be prepared for some that may only come in mid-February or March. Being aware of this timeline can help taxpayers avoid unnecessary delays and confusion.
As tax season unfolds, preparedness is the key for a successful filing experience. With several free filing options available and the potential for extensions for certain individuals, filers have a variety of resources at their disposal. By diligently gathering necessary documents, utilizing available programs, and taking note of extended deadlines, taxpayers can navigate the complexities of tax season with confidence. As the deadline draws nearer, it is essential to stay informed and proactive, ensuring that the pursuit of a tax refund is both efficient and accurate.