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☆ Want your tax refund faster? Here’s what to do
▼ + stars: | 2023-02-07 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +5 min

The IRS says it typically issues federal refunds within 21 calendar days of accepting your tax return, assuming there are no issues. Tom O’Saben, director of tax content for the National Association of Tax Professionals, said some of his clients have received their refunds in as little as 10 days. “If you filed on paper and are expecting a refund, it could take four weeks or more to process your return,” the IRS notes on its website. This can be an issue if you got married recently and changed your last name but failed to inform the Social Security Administration of your name change. If the IRS finds you still owe tax on that unreported income, you may have to return some or all of your refund, plus interest, and possibly an underpayment penalty.

☆ Don't risk a tax audit. Here are four reasons the IRS may flag your return
▼ + stars: | 2023-02-03 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

"People are scared to death of the IRS," said Karla Dennis, an enrolled agent and founder of Karla Dennis and Associates. 4 red flags for an IRS auditThe statute of limitations for an IRS audit is typically three years, with the clock starting once you file, explained John Apisa, a CPA and partner at PKF O'Connor Davies LLP. Refundable credits The IRS also reviews refundable tax credits more carefully since filers can still receive the tax credit with zero balance due. While audits have declined overall, the drop is lower for filers claiming the earned income tax credit, a tax break for low to moderate earners, which has contributed to higher audit rates among Black Americans. Round numbers Deductions with rounded expenses may raise eyebrows, said Preeti Shah, a certified financial planner and CPA at Enlight Financial in Hamilton, New Jersey.

☆ IRS about 3 to 5 times more likely to audit Black Americans' tax returns, study finds
▼ + stars: | 2023-02-02 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Jeffrey Coolidge | Photodisc | Getty ImagesBlack Americans are roughly three to five times more likely to face an IRS audit than other taxpayers, according to a new study. Specifically, the study examines audits of filers claiming the earned income tax credit, a tax break for low to moderate earners. The findings show Black filers claiming the earned income tax credit were more likely to be audited than non-Black filers claiming the same credit. Evelyn Smith Study co-authorSmith said the IRS has focused on specific mistakes with claiming the earned income tax credit, such as missing dependents or misreporting income, which are required for eligibility. "Focusing on these individual-level issues rather than the total dollar amount of underreporting seems to be driving these differences," she said, noting a shift to self-employed earned income tax credit filers would help address the problem.

☆ As some retirees worry about surprises this tax season, these resources may help
▼ + stars: | 2023-02-01 | by ( Lorie Konish | ) www.cnbc.com time to read: +4 min

Seniors may also seek help from other tax professionals this year to meet the April 18 deadline to file their federal returns. Where to find free tax helpAARP's Tax-Aide program is the largest volunteer-based tax assistance program in the country, according to Lee-Villanueva. The program works in collaboration with the IRS Volunteer Income Tax Assistance, or VITA, and Tax Counseling for the Elderly, or TCE, programs, which provide free basic tax return preparations to individuals who qualify. The government temporarily made the child tax and earned income tax credits more generous during the Covid pandemic. Tom O'Saben director of tax content and government relations at the National Association of Tax Professionals

☆ A conservative group blocked student-loan forgiveness because 2 borrowers wanted more relief than they qualified for. Here's why it thinks no one else should get to benefit from Biden's plan.
▼ + stars: | 2023-02-01 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +7 min

One of the cases involves two student-loan borrowers who sued because they didn't qualify for the full $20,000 amount of relief. "Extra breathing room for millions of Americans is on hold because of lawsuits brought by opponents of this Administration's student debt relief plan," the White House wrote on Twitter this week. Here are some standouts from the Job Creators Network's argument on why Biden's student-loan forgiveness should be blocked. The debt-relief plan demonstrates "gross over-inclusiveness"Leading up to the announcement of Biden's debt relief, many advocates and Democratic lawmakers were urging him to make the relief as expansive as possible, without any thresholds. "There was a national emergency that impacted millions of student borrowers," the official said.

☆ Tax credits vs. tax deductions: How they differ, and what to know before you file
▼ + stars: | 2023-01-31 | by ( Greg Iacurci | ) www.cnbc.com time to read: +5 min

Tax credits offer a dollar-for-dollar reduction in liabilityA tax credit offers a dollar-for-dollar reduction of your taxes. For example, let's say you get a $1,000 tax credit and have a $5,000 tax liability. It's therefore a more indirect way of cutting your taxes relative to tax credits, which directly lower your actual tax liability. On the other hand, a $1,000 tax credit would shave $1,000 off their actual tax bill total. Tax deductions are a lot more valuable [for people] in the 37% tax bracket than someone in the 10% tax bracket.

☆ How to figure out the best time to file your tax return: Don't 'race to the finish line,' say tax pros
▼ + stars: | 2023-01-30 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

ozgurcankayaAs tax season begins, you may be eager to file your tax return for a faster refund and to check the annual task off of your list. Most tax forms arrive by late January to mid-February, but others may be later. Avoid tax identity theft by 'filing ahead of fraudsters'That said, there's no reason to wait once you have all your necessary forms. Tax-related identity theft happens when someone uses your Social Security number to file a return and claim a fraudulent refund. You may find out through a rejected tax return or IRS letter, among other warning signs, according to the IRS.

If you've been debating whether to file your taxes early this year, tax experts say there are now several reasons that might be a good idea. "It’s safe to assume your Social Security number is in the hands of someone you don’t want to have it," Long said. If you are exposed to identity theft-related tax fraud, the process to file your real return could be onerous, she said. There are other reasons filing early could prove beneficial, especially if you're owed a refund. For many people who expect larger refunds, she said, filing early will help pay for, or help you plan for, expenses for the rest of the year.

☆ IRS warns tax refunds may be 'somewhat lower.' With high inflation, that's a 'double whammy' for families, says advisor
▼ + stars: | 2023-01-26 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Bill Oxford | E+ | Getty ImagesIf you're banking on a tax refund, it may be "somewhat lower" than last year's payment, according to the IRS. Meanwhile, many Americans are still struggling financially, with nearly one-third relying on their tax refund to make ends meet, a recent Credit Karma survey found. Joe Buhrmann, a certified financial planner and senior financial planning consultant at eMoney Advisor, said smaller refunds and high inflation may be a "double whammy" for some families. Thanks to the American Rescue Plan of 2021, many families got a boost from the enhanced child tax credit, worth up to $3,600 per child, and child and dependent care tax credit of up to $4,000 per dependent. For 2022, the child tax credit dropped back to a maximum $2,000 per child, and the child and dependent care tax credit reverted to $1,050 per dependent.

☆ Where to Get Your Taxes Done for Free
▼ + stars: | 2023-01-25 | by ( ) www.wsj.com time to read: +8 min

Some don’t offer free filing if you have to record retirement income or self-employment income, for example, and other specific deductions and credits are sometimes excluded from free tax filing. What’s included:Wage and salary incomeLimited interest and dividend incomeEITCChild creditStudent loan interest deductionState returnFree File through the IRSIf you are a middle-income earner, even if you have relatively complicated taxes, you should qualify to file your taxes for free through the IRS’s Free File program. Eligibility for free state tax filing through Free File depends on your state and the Free File provider you choose. However, Free File is a separate program and distinct from these company’s free online offerings, such as the ones detailed above. You have to access Free File through the IRS.gov Free File portal and create an account through the program.

☆ Why the $7,500 EV tax credit may be tougher to get starting in March
▼ + stars: | 2023-01-25 | by ( Greg Iacurci | ) www.cnbc.com time to read: +6 min

The Inflation Reduction Act, a historic climate law President Biden signed in August, tweaked rules for an existing tax credit associated with the purchase of "clean" vehicles. The law, which extended the tax break through 2031, changed some requirements to get the full $7,500 value of the "clean vehicle credit." Some rules are on hold until the IRS issues guidanceSome of the tax credit rules took effect on Jan. 1. How the $7,500 clean vehicle tax credit worksWestend61 | Westend61 | Getty ImagesThe clean vehicle credit is a "nonrefundable" tax credit. The pending rules will tie the $7,500 credit amount to whether a new clean vehicle's battery meets a critical mineral and a battery component requirement.

☆ These are the key tax forms you need to file your return — and when to expect them
▼ + stars: | 2023-01-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

pcess609If you're expecting a refund this season, it's critical to file a complete and accurate tax return to avoid "extensive processing" and delays, according to the IRS. Whether you're working with a tax professional or filing on your own, here's what to know about your tax forms — and when to expect them. When to expect your tax formsWhile most tax forms have a Jan. 31 deadline, others aren't due until mid-February or beyond, said certified financial planner John Loyd, owner at The Wealth Planner in Fort Worth, Texas. Regardless of your situation, it's important to have all the necessary forms handy before filing your return, Loyd said. Review last year's return 'page-by-page'If you're not sure which tax forms to expect, experts say last year's tax return is a great starting point.

☆ Tax season starts with boosted IRS workforce, new technology as agency begins to deploy $80 billion in funding
▼ + stars: | 2023-01-23 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Tax season kicked off for individual filers Monday with a bigger IRS customer service team and enhanced technology as the agency begins to deploy its nearly $80 billion in funding. Over the past several months, the IRS has hired 5,000 new customer service staff, aiming to "significantly increase" the number of answered calls, Deputy Secretary of the Treasury Wally Adeyemo told reporters Friday. IRS service was flagged as one of the agency's "most serious problems" in the National Taxpayer Advocate's 2022 annual report, with only 13% of callers reaching live assistance during the 2022 filing season. The agency also plans to improve customer service through technology, including the ability for filers to respond to certain IRS notices online and for the IRS to scan paper returns. "These improvements showcase how we are modernizing both technology and customer service to bring the IRS into the 21st century and how the IRS plans to deploy [Inflation Reduction Act] resources in the years to come," Adeyemo said.

☆ Filing your 2022 taxes: Why your refund may be smaller
▼ + stars: | 2023-01-22 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +8 min

Child tax credit: For tax year 2022, parents may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 ($400,000 if filing jointly). This year, if you have one child or dependent, you can only get a maximum credit of $1,050 ($2,100 for two or more). So if it happened late in the year, that may bump your 2022 income into a higher bracket, much the way a big one-time bonus might. Ways to potentially increase your refund or reduce your 2022 tax billTax year 2022 is over, but there still may be a few things you can do now to increase the money the IRS sends you or reduces the amount you will owe. Make an IRA contribution: You still may make 2022 contributions to an IRA up until April 18, 2023.

☆ How to cash in on the new wave of electric car tax credits and rebates that could save you thousands on a new ride
▼ + stars: | 2023-01-18 | by ( Alexa St. John | ) www.businessinsider.com time to read: +8 min

Electric vehicles are expensive, but tax credits might be able to help. The Biden Administration's Inflation Reduction Act, passed last August, introduced some new EV credits and extended existing ones, with some changes. Here's what to know about claiming tax credits and rebates on electric car purchases. George Rose/Getty ImagesState creditsDifferent states have different incentives for EVs, in addition to the federal tax credits. Not every state has an electric car tax credit or rebate program, so it's important to check individual state websites for information.

☆ There's still time to avoid a penalty for fourth-quarter estimated taxes — but the clock is ticking
▼ + stars: | 2023-01-17 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

There's still time to avoid a penalty if you didn't pay enough taxes in 2022 — but the clock is ticking. If you are self-employed or receive income from gig economy work, investments and more, the deadline for your 2022 fourth-quarter estimated tax payment is Jan. 17. Your payment may reduce your 2022 tax bill and bypass extra penalties and interest, according to financial experts. You can also make payments through your IRS online account, which provides access to payment history, or digitally through the Electronic Federal Tax Payment System. You can see other options through the IRS payments website.

☆ After 'misery' for tax filers in 2022, IRS to start 2023 tax season stronger, taxpayer advocate says
▼ + stars: | 2023-01-12 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

After another challenging year for the IRS in 2022, the agency may be primed for a better 2023 tax season — but improvements may take time. "The bad news is that taxpayers and tax professionals experienced more misery in 2022," wrote National Taxpayer Advocate Erin Collins. Based on this progress, the report finds the IRS is "poised to start the 2023 filing season in a stronger position." During the past two seasons, the IRS couldn't tackle current-year paper-filed returns until after the filing season ended. But the "significant reduction" of inventory in 2022 will allow the agency to process paper returns during the filing season, the report said.

☆ Tax filing season starts January 23, IRS says
▼ + stars: | 2023-01-12 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

New York CNN —The IRS will start accepting 2022 federal income tax returns on January 23, the tax agency announced on Thursday. In addition, tax filing and payment deadlines will be extended for anyone living in counties declared federal disaster areas due to recent natural disasters. It also includes tax filers who don’t live in a federally declared disaster area but whose relevant tax records are located there (e.g., with a tax preparer or at a business in the area). In addition, the IRS also offers Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, which are free basic tax return preparation for those who generally make $60,000 or less. IRS expects customer service to improve this seasonDuring the prior two filing seasons, tax filers experienced an array of customer service problems at the IRS due to staffing shortages and other pandemic-related difficulties at the IRS.

☆ Tax season opens for individual filers on Jan. 23, says IRS
▼ + stars: | 2023-01-12 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

It's official: The tax season kicks off for individual filers on Jan. 23, the IRS announced on Thursday. For most taxpayers, you must file your federal return and pay your balance by April 18 to avoid racking up penalties and interest. "This filing season is the first to benefit the IRS and our nation's tax system from multi-year funding in the Inflation Reduction Act," said acting IRS Commissioner Doug O'Donnell. "With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year." What's more, if you're claiming the earned income tax credit — a tax break for low- to moderate-income worker — or an additional child tax credit, the IRS can't issue your refund before mid-February, according to the agency.

☆ Mega Millions jackpot jumps to $1.35 billion for the next drawing. Here's the tax bill if there's a winner
▼ + stars: | 2023-01-11 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +1 min

You may face long odds of hitting the Mega Millions jackpot — now worth $1.35 billion — but the taxman is always guaranteed a slice when there's a winner. The jackpot jumped again after no ticket matched all six numbers drawn Tuesday night to land the grand prize. If won in the next drawing — set for Friday night — it would mark the second-largest Mega Millions jackpot ever and the fourth-largest lottery prize in history. Most winners, however, choose the lump sum cash option, which for this jackpot is $707.9 million. Yet because the top marginal income tax rate of 37% applies to income above $578,125 for individual tax filers and $693,750 for married couples, you could count on owing more to the IRS at tax time.

☆ The first economic plan the new GOP House proposed would raise the deficit by $100 billion
▼ + stars: | 2023-01-09 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +3 min

Their first target: $80 billion in IRS funding from the Democrats' Inflation Reduction Act. The IRS funding was meant to relieve an overburdened agency and beef up enforcement on some of the wealthiest Americans. Of the $80 billion, $45.6 billion is directed towards tax enforcement, specifically targeting areas that have been challenging for the IRS, like global high-net-worth filers. The Congressional Budget Office previously found that the enforcement funding would bring in $204 billion over the next 10 years. "With inflation high, interest rates rising, and debt approaching record levels, rescinding IRS enforcement funds would be a big mistake."

☆ A flurry of environmental tax breaks just came into effect thanks to last year's climate bill. From solar to electric vehicles, here's how you could save thousands of dollars.
▼ + stars: | 2023-01-08 | by ( Kelsey Vlamis | ) www.businessinsider.com time to read: +5 min

The bill includes tax credits for electric vehicles, solar panels, and home energy updates. At that price, the claimable tax credit would be $6,000. The tax credit for solar is set to last until 2032, at which point it will lower and then expire in 2035 unless Congress renews it. As of January 1, a household can claim a tax credit of up to $150 for an energy audit conducted by a professional inspector. Buying an electric vehicleIncentives to purchase new or used electric vehicles were also boosted in the new climate bill.

☆ Mega Millions jackpot surges to $785 million. If there's a winner, this is the tax bill
▼ + stars: | 2023-01-03 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +2 min

Anadolu Agency | Anadolu Agency | Getty ImagesMega Millions players may be daydreaming about what they'd do with an extra $785 million, the game's current jackpot amount. The lump-sum cash option — which most winners choose — for this jackpot is $403.8 million, as of midday Tuesday. $96.9 million in taxes would be shaved off cash optionAssuming you're like most winners and were to choose the cash option, a mandatory 24% federal tax withholding would reduce the $403.8 million by $96.9 million. The top federal income tax rate is 37% and applies to income above $578,125 for individual tax filers and $693,750 for married couples who file a joint tax return. There also could be state or local taxes depending on where the ticket was purchased and where you live.

Important: The standard deduction is just one of many tax deductions for which you may be eligible. Standard deduction: 2022 and 2023The amount of the standard deduction is adjusted every year to account for inflation. How the standard deduction worksWhen you file your federal tax return, you can choose to use either the standard deduction or itemize your deductions, whichever amount is highest. Quick tip: If you're not sure whether to take the standard deduction or itemize deductions, talk to a tax professional. If your income is less than the standard deduction then you do not have to file a federal tax return.

☆ 5 tax and investment changes that could boost your finances in 2023 amid economic uncertainty
▼ + stars: | 2022-12-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

Bigger contribution limits on retirement accountsIf you're eager to boost your retirement savings, there's good news for 2023: higher contribution limits for your 401(k) and individual retirement account. The contribution limits have also increased for IRAs, allowing you to save up to $6,500 for 2023, up from $6,000 in 2022. Higher income limit for Roth IRA contributionsThe 2023 inflation adjustments also mean more investors may qualify for Roth IRA contributions, experts say. "But how about Roth [IRA] contributions?" While some investors may seek "complicated" moves, like so-called backdoor Roth conversions, which transfer after-tax 401(k) contributions to a Roth IRA, Pon urges investors to double-check Roth IRA contribution eligibility first.

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