Tax season is here. It is that time of the year when accountants feel confused, stressed, and in a chaotic state. While there can be a multitude of reasons for you to feel this way, knowing things – from the right documents you need to the deadlines and the laws that will affect your clients, can be helpful. Whether you are a seasoned tax preparer or filing for the first time, having the right knowledge can empower you. Remember, at times when deadlines are fast approaching, it is the experts like you that clients rely on.
In this blog, Finsmart Accounting – globally trusted for outsourced bookkeeping services – will underline some of the important things that will not only help you file taxes easily but also give you confidence and keep stress at bay.
Tax filing FAQs 2024
Let’s first look at the common tax filing queries that we come across whenever the season starts:
Are tax year and tax season the same thing?
No, it is not the same thing. The tax year is the financial year when you earn, pay your income taxes, work on side gigs or freelance, and make charitable contributions. During the tax season, you file, report, and pay taxes owed from the last year. It is always the past tax year’s filings done in this year’s tax season.
When is the 2024 tax filing season?
The Internal Revenue Service (IRS) has started accepting tax returns from January 29. They will continue to accept the tax returns until April 15. Taxpayers in Maine and Massachusetts will have deadlines until April 17 because of Patriot’s Day and Emancipation Day holidays.
Taxpayers can file for an extension of up to six additional months, October 15, 2024, to submit a complete return. If your clients still owe taxes, they must pay the estimated amount, along with the extension form. Taxpayers can file a late return without an extension. In case there are no taxes owed or the taxpayer expects a refund, there is no penalty. If there is an outstanding tax, they will have to pay a penalty.
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When should taxpayers expect their refunds?
If the taxes are filed electronically, through direct deposit and there are no issues with the return, taxpayers can expect their refund within 21 days. Legally, the IRS has to wait until mid-February to issue refunds to taxpayers who claimed earned income tax credit or additional child tax credit. Such payments must be received by February 27 through direct deposit and no other issues.
Can taxpayers see the status of the refund?
The status of the refund is available with the IRS in the “Where’s My Refund?” According to the IRS, the Where’s My Refund? tool provides details on a taxpayer’s refund. It will be more elaborate than just a typical message notifying that it is being processed. It will become easy for taxpayers and accounting firms to see if the IRS needs more information or other details.
How are the tax brackets different in 2023 from 2024?
Due to inflation, the IRS has adjusted the tax brackets for both 2023 and 2024. While in 2023, the tax brackets were upward by about 7% to account for last year’s high inflation. The IRS adjusted its tax brackets upward for 2024, pushing limits by 5.4% higher this year. A crucial tax filing update for 2024!
What are tax credits and deductions?
Both tax credits and tax deductions are methods where you can help your clients save more on taxes. However, both of them work differently. Tax deductions help lower the amount of taxable income. Some deductions are only available if you itemize your deductions, while others are available when you take standard deductions.
Tax credit is the dollar amount subtracted from your tax bill. There are two types of tax credits: refundable and non-refundable. If the credit is greater than the owed amount, the difference is paid as a refund. If it’s a non-refundable credit, the tax bill will become zero. Another important difference you must understand before tax filing in 2024.
What’s the purpose of online accounts in 2024?
Taxpayers and individual taxpayer identification number holders can use their online accounts to view, approve, and electronically sign the tax information authorizations from their tax professionals.
The online accounts can also be used to perform the following tasks:
– View schedules and the history of the payments
– View or apply for payment plans
– Request for tax transcripts
– Find e-copies of IRS notices
– View data from the recently filed tax return. This will also include adjusted gross income
– Verify bank accounts and save multiple accounts. Eliminate the need to re-enter bank account information after every payment.
We are done with tax filing FAQs for the year 2024. Let’s now look at some tips and ideas for filing your tax like a pro!
Tips to file taxes in 2024
– Gather all the information needed to file the client’s return
– Organize tax records including Social Security Numbers and Identity, individual taxpayer identification numbers, adoption identification numbers, and identity protection personal identification numbers.
– Follow up on documents until you have everything handy
– Tax preparers should be especially mindful of clients who are reporting unemployment compensation, pensions, or retirement plan distribution and annuities.
– Accountants should also assist their employees in deciding if they should file electronically or through direct deposit.
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Be aware of tax scams
As businesses get more sophisticated in their approach, the scammers become better at scamming. Thousands of people have lost millions of dollars and their identities to these scams. Scammers know who, when and how to lure their next target. They use emails, telephones, and text messages to target individuals, businesses, accounting, and tax professionals.
As we continue to embrace digitalization, awareness becomes all the more important. IRS does not initiate contact with taxpayers by email, text messages, or social media channels. They would never directly request personal or financial information.
Learn more about identifying tax scams here. Know more about tax scams and phishing from the IRS.
Tax filing in 2024: It’s time to gear up!
With the right preparation and optimum guidance, you can help your accountants stress out less. While tax season evokes a lot of apprehension and complexity, it also presents an opportunity to feel empowered and take responsibility and accountability. Gain the knowledge you need, stay organized, and seek help wherever necessary.
For small accounting firms, running on limited resources, feeling overwhelmed is normal. For leaders, it is important to address this issue and seek help. Outsourcing is a great way to handle the seasonal workload without hiring additional resources. It also allows accounting firms to cater to more clients while paying less.
Get help from the top tax experts today. Write to us at connect@finsmartaccounting.com.
Also, don’t forget to check out the services we are most popular for:
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Maanoj is Co-founder & Director of Growth Strategy & Alliance at Finsmart Accounting. He is an Outsourcing Expert, a People Champion, and a Dynamic Leader with strong Business Strategy and Scaling-up experience. He has incubated businesses, sold & exited ventures; helped build strong enterprises in very diversified verticals like Fintech, HR & Consulting spaces in various CXO capacities over the last 20 years.
