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Where e-filing information return forms comes full circle. We support 1099, 1098, W-2, and Affordable Care Act forms.

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Get Ready Early for the 2023 Tax Season

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The 2023 tax season is already upon us. With the help of this article, we’ll talk you through some best practices to get ready for your 2022 federal tax return.  The 2023 Tax Season is Upon Us The time has come to start preparing for your 2022 federal tax return. Filing taxes can be a daunting task, but with the right knowledge and preparation, it doesn't have to be an overwhelming experience. It is important to understand the process and all the necessary steps involved so you can feel in control of your finances and avoid any potential problems or delays, especially as we approach the upcoming tax filing season. Preparing for the 2022 federal tax return is an important part of managing your finances. It's important to understand the process and be aware of any changes to the tax code that might affect you. Let’s discuss helpful tips on organizing your documents, understanding deductions and credits, filing deadlines, and more. Check Your Bookkeeping Just like packing for an extended vacation, you can’t successfully prepare for tax season in one day. You’ll forget things or leave out important assets, and it’s much more annoying to make changes to your taxes when they’re being prepared and processed. The best practice for your 2022 federal tax return (and every tax return in the future) is to make sure you are tracking and recording your transactions and important paperwork as it is created, not after the year is over. You also want to ensure that your bookkeeping is consistent – monthly expenses for a renovation or new product or service venture should be consistent in their classification. For example, if you have a web developer creating and updating an app for your business, you can’t record those expenses as “investments” one month and “marketing expenses” the next. Consistency is key. Reconcile Your Bank Accounts for the 2023 Tax Season Reconciling your bank accounts just means making sure your books (whether you do them by hand or use a …

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Preparing for 2023 Tax Brackets with Inflation Adjustments

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As of late 2022, annual inflation was over 8%, and consumer prices are up more than 9%. Let’s break down how inflation adjustments will affect our 2023 tax brackets. Inflation on the Rise – IRS Response We previously talked about the effects of inflation on business and tax trends earlier this year. And now the IRS is addressing these issues in an adjustment plan that affects more than 60 tax provisions. They recently shared a 28-page document outlining all of the provisions and changes, but we wanted to share some of the highlights with you here as well. The procedures in this provision went into effect on October 18, 2022, and will likely affect many taxpayers’ filings in the 2023 tax season. If you or your employees have salaries that did not keep up with the crazy inflation hikes this year, tax savings could be in your future for the 2022 tax year when it comes time to file your returns. The inflation adjustments are coming from the fact that prices haven’t increased this drastically for more than 40 years! With the price of everything – gas, groceries, homes, and everything in between – going up so quickly, the IRS has made inflation adjustments to the 2023 tax brackets. But what does that mean for you, the taxpayer? Let’s talk about it. 2023 Tax Brackets with New Inflation Adjustments The IRS makes inflation adjustments every year, but this year the adjustments were much more substantial. Some increases range from $400 to $1,000 depending on how the taxpayer files (married jointly, head of household, etc.). And tax year 2023 withholding rates have also been adjusted, which means employees will see slightly larger paychecks even without having received a raise for the year. For the tax year 2023, the standard deduction for those who file as married, filing jointly will increase to $27,700. This is a $1,800 increase from the previous year. For those filing single or married filing separately, the standard deduction will be $13,850 (a $900 …

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Taxpayers Can Now Amend Taxes Electronically

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The Internal Revenue Service (IRS) recently announced a change in the process for amending forms and corrections filing. Here’s the latest on this change and the changes related to it. You Can Now Amend Taxes Electronically Recently, the IRS announced that you can amend taxes electronically for Forms 1040 and 1040-SR for the tax years 2019, 2020, and 2021, as well as Forms 1040-NR and 1040-PR for the tax year 2021. The IRS also shared information that a new checkbox was added to the forms listed above in order for taxpayers to indicate that a superseding return is being filed electronically. Form 1040-X is the one that allows you to amend taxes should you have a need, and you are still able to file a paper copy if you’d like. The IRS just expanded the ability to amend taxes to include electronically, too. When You Should Amend Taxes There are several instances where you should amend taxes. The following situations are all worthy of an effort to amend taxes: You noticed you’ve missed an opportunity to claim a tax deduction or credit – whether the amended refund you get will be substantially or even slightly larger is of no consequence. If the deduction or tax credit is worth it to you, you should do it – and it’s even easier now because you can amend taxes electronically. You chose the wrong tax filing status by mistake. You don’t have to keep the same status year after year, and it’s easy to get into a routine and forget to double-check this information. You have added or removed dependents in your living situation but haven’t reported that change on your tax return. You forgot to claim taxable income on your tax return. It’s easy to forget and lots of people have side hustles. Make sure yours are included, even if they aren’t a huge or majority percentage of your overall yearly earned or passive income. You mistakenly claimed an expense, deduction, or credit that you aren’t actually eligible for at this time. Math or clerical …

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IRS Forms 1098 & 1099 Instructions

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IRS Forms come with detailed instructions, but they can sometimes be hard to understand if you aren’t a tax expert. Let’s break down some of the general IRS Forms 1098 and 1099 instructions. General Instructions for Information Returns There are several information returns listed in this 31-page general instructions sheet from the IRS for the tax year 2022. And much like the Terms and Conditions pages, IRS instructions aren’t the most exciting or easy-to-read material. They do make it as straightforward as possible, but tax codes are long and tedious, and difficult for veteran tax experts to understand – so the first thing you should remember about how to file IRS forms is that they change often. That’s why having a dedicated resource like eFile360 can be beneficial: you’ll always have a real person to reach out to with questions. The 1098 and 1099 instructions also work for a number of other information returns, like 1096, 1097, 3921, 3922, 5498, and W-2G. You’ll find a table of contents that directs you to the latest changes, who, where, and what to file, and much more. This instructions sheet is now labeled for “continuous use,” which means you can click this IRS link and it should reflect the latest changes for those information returns and the filing process to use. Filing Instructions There are a few big 1099 instructions to pay attention to when you start the filing process for these IRS forms. The first thing to remember is that right now the electronic filing threshold is set at 250 forms. That means if you have 250 or more 1099s, 1098s, etc., to file for the tax year 2022, you must file them electronically. But that’s only for right now. If new instructions or updated articles are shared by the IRS, that threshold could change, which may affect your filing process. It’s best to use electronic filing and organization like the services eFile360 offers, both for accuracy and in case the threshold changes in a way that impacts you or …

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Real Estate Tax Tips: Buying, Selling, & Renovating

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The 2022 housing market is the hottest in several years, and that means people are throwing themselves into it with the hopes of making a quick buck or reducing their tax burdens. Before you rush into it, here are some real estate tax tips for buying, selling, and renovating your home. Tax Tips for Buying Your Home There are some great ways to save some money on real estate tax items if you know where to look. The first is on your 1098 – this is provided by your mortgage lender or servicer. It documents how much you paid in mortgage interest over the tax year, and you should get one if that interest totals more than $600. In order to claim a deduction for mortgage interest, you must itemize. You’ll use Schedule A (Form 1040) as well as the standard 1040. This form is used if you aren’t renting the home (you’ll use Schedule E instead) or running a business out of it (you’ll use Schedule C). And if you’re buying a house soon, or you just bought one, you can deduct prepaid mortgage interest (points). Here’s another tax tip: if your adjusted gross income is less than $100,000, you can deduct 100% of your mortgage insurance premiums as well. You should also remember that you can deduct state and local property taxes, with a limit of $10,000. However, there are several fees that aren’t deductible when it comes to real estate tax and the purchase of a home, including fees paid at or before closing (title insurance, appraisal, surveys, etc.), property insurance, depreciation, and utility payments. Tax Tips for Selling Your Home When it comes to selling your house, here are a few important tips and information. First, taxpayers who are single filers can exclude up to $250,000 of capital gains on the profits made from the sale of their home, and married couples can exclude up to $500,000. But there are some stipulations: the sellers must have owned and used the home as a primary residence for 2 of the last 5 years before the sale. The two years do …

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4 More Reasons You Should Use an IRS-Authorized E-file Provider

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A few years ago, we featured an article on our blog with 7 benefits of using an online and authorized e-file provider. We wanted to share some more great reasons to use a trusted and IRS-approved service when it comes to storing and filing your information return forms. Safety & Assurance – Your Data Is Well-Protected by a Trusted Provider In order to become an authorized e-file provider for the IRS, businesses like eFile360 must complete an application process. That application process is aimed at authenticating our business and the people who run it, in order to ensure that your tax information is going to be safe with us. Once the application is complete, the final step in the authorization process is to pass a suitability check. The IRS conducts this check themselves. The suitability check often involves a credit check, tax compliance check, criminal background check, and a thorough check for any prior non-compliance with IRS e-file requirements. If the last few years have taught us anything, it’s that we need safe and effective ways to do business online (even with sensitive information). And with cybersecurity threats on the rise, it’s important that you trust your tax information to a firm that is dedicated to safeguarding your data year after year. Elevated Expertise As an authorized e-file provider, eFile360 has proven its mastery of the information return filing system and we also bring our own team’s experience to the table for you to benefit from. Sometimes, the self-service option seems like the easiest or cheapest option, and we offer that as well. But more often than not, there are always one or two outliers while you’re working through your information returns. Maybe you’re not sure if an employee’s retirement distribution is with or without exceptions, or you’re still a little unsure about when you should use a Form 1099-NEC versus Form 1099-MISC. You could try to sift through the IRS instructions or hope that their call …

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