March is National Clean Up Your IRS Act Month, which serves as a timely reminder to review, organize, and streamline your tax-related documentation and strategies.
Tax season is upon us! It’s a time when individuals and businesses alike take stock of their financial affairs, helping ensure compliance with tax regulations and optimize their strategies.
In this blog post, we’ll explore the significance of this month, offer practical tips for navigating tax season, and highlight how Johnson Wealth and Income Management can assist you in enhancing your tax strategy.
What Is National Clean Up Your IRS Act Month?
National Clean Up Your IRS Act Month is a period dedicated to tidying up your financial records, especially those pertaining to taxes. It serves as a reminder to individuals and businesses to review their financial documentation, helping ensure accuracy, and address any outstanding tax-related matters promptly. Whether it’s filing overdue returns, organizing receipts, or updating financial records, this month encourages proactive engagement with tax-related responsibilities.
The IRS expects more than 128.7 million individual tax returns to be filed by the deadline. The tax deadline is April 15, 2024, although taxpayers are free to start working on returns well beforehand. If you are unable to file before that date, you still have options.
- You can file for an extension. Filing an extension gives you an additional six months to October 15, 2024, to submit a complete return. If you believe you will owe taxes, you must estimate how much you owe and pay the amount due with your extension form .
- You can file a late return without an extension. If you do not owe taxes or you expect a refund, you may not owe a penalty. If you owe taxes, you may be charged a penalty for filing late.
- If you do not owe taxes or you expect a refund, you may not owe a penalty. Still, it may be best to file as soon as you can to receive your refund or to ensure you don’t owe a balance.
In addition to National Clean Up Your IRS Act Month, the IRS continues to make improvements to make filing returns easier for taxpayers.
- Expanded in-person service through the opening/reopening of Taxpayer Assistance Centers.
- Increased help available on the toll-free line and an expanded customer call-back feature designed to significantly reduce wait times.
- Improvements in the Where’s My Refund? Tool.
- Enhanced paperless processing.
- Enhanced individual IRS online accounts that include chat help, the ability to store bank accounts for payments, and more.
- A pilot program called Direct File allows certain taxpayers the option of filing their returns directly with the IRS for free. Direct File is on a phased rollout and is expected to be available in mid-March.
About filing your tax return
If you have income below the standard deduction threshold for 2023, which is $13,850 for single filers and $27,700 for those married filing jointly, you may not be required to file a return. However, you may want to file anyway. In many cases, especially for people with low incomes, these features can increase the amount you could receive in a refund. There are some key factors to make sure you look out for.
Over-withholding
If you worked during 2023 and had taxes withheld from your paycheck, you may be able to get some or all of that “over-withholding” back in your refund. Make sure you get W2 forms from all your employers and enter that information into the tax form when you fill it out.
The earned income tax credit
If you worked or were self-employed and had earned income under $63,698, you could receive the Earned Income Tax Credit (EITC) 1 by filing a tax return. If you are eligible for this credit, the maximum amount you could receive is:
- $600 if you have no dependent children
- $3,995 if you have one qualifying child
- $6,604 if you have two qualifying children
- $7,430 if you have three or more qualifying children
Further Tips for Tax Season Success
- Start Early and Stay Organized: Don’t wait until the last minute to gather your tax documents. Begin organizing your financial
records as soon as possible to avoid the stress of rushing through the process later on.
- Utilize Technology: Embrace tax preparation software or apps to streamline the filing process. These tools can help you input information accurately, identify potential deductions, and file your taxes electronically for faster processing.
- Maximize Deductions and Credits: Familiarize yourself with available tax deductions and credits to help minimize your tax liability. Consult with a financial advisor to help ensure you’re taking advantage of all eligible tax breaks.
- Stay Informed: Tax laws and regulations undergo changes regularly. Stay updated on the latest developments to help ensure compliance and help optimize your tax strategy accordingly.
- Seek Professional Assistance: If you’re uncertain about complex tax matters or need personalized guidance, consider consulting a financial advisor. Their expertise can help you navigate intricate tax scenarios and make informed decisions.
Johnson Wealth and Income Management: Your Tax Strategy Partner
At Johnson Wealth and Income Management, we understand the importance of a comprehensive tax strategy in achieving your financial goals. Our team of experienced Fiduciaries can assist you with developing tailored tax plans designed to help minimize your tax burden while maximizing your wealth accumulation and preservation efforts.
Our services include:
- Tax Planning: We’ll work closely with you to analyze your financial situation, identify tax-saving opportunities, and implement strategies to help optimize your tax position.
- Retirement Planning: We take a sound approach to retirement planning, looking at your potential retirement income sources and crafting personalized plans tailored to your unique financial goals and needs. Our team provides comprehensive guidance to help you reach a secure retirement.
- Investment Management: Our investment strategies are designed with tax efficiency in mind, aiming to help maximize after-tax returns while mitigating tax implications.
- Estate Planning: We’ll help you navigate complex estate and gift tax considerations, helping ensure your assets are structured in a tax-efficient manner and aligned with your long-term objectives.
- Ongoing Support: Our commitment to client satisfaction extends beyond tax season. We provide continuous support and proactive tax management throughout the year, keeping you informed and empowered to make confident financial decisions.
Final Thoughts
As March and tax season unfold, take advantage of National Clean Up Your IRS Act Month to review your financial affairs and help optimize your tax strategy. By following the tips outlined above and partnering with Johnson Wealth and Income Management, you can help navigate tax season with confidence, secure in the knowledge that your tax-related matters are in capable hands. Let this month be the catalyst for achieving greater financial clarity, efficiency, and peace of mind.
All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Johnson Wealth & Income Management and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. Investing involves risk. There is always the potential of losing money when you invest in securities. Asset allocation, diversification and rebalancing do not ensure a profit or help protect against loss in declining markets. All information and ideas should be discussed in detail with your individual advisor prior to implementation. The presence of this website, and the material contained within, shall in no way be construed or interpreted as a solicitation or recommendation for the purchase or sale of any security or investment strategy. In addition, the presence of this website should not be interpreted as a solicitation for Investment Advisory Services to any residents of states where otherwise legally permitted to conduct business. Fee-based financial planning and Investment Advisory Services are offered by Sound Income Strategies, LLC, an SEC Registered Investment Advisory firm. Johnson Wealth & Income Management and Sound Income Strategies LLC are not associated entities. Johnson Wealth & Income Management is a franchisee of the Retirement Income Source. The Retirement Income Source and Sound Income Strategies LLC are associated entities. © 2023 Sound Income Strategies.
