How to Prepare for the 2023 Tax Season

Date: December 23, 2022

The IRS recently released information to help taxpayers prepare for the 2023 filing season. This
included information on what taxpayers should do to begin preparing their 2022 return, as well
as information on what has changed since the 2022 filing season.

The first change highlighted by the IRS is that taxpayers will now receive a form 1099-K if they
received payment from a third party for goods and services that exceeded $600. This is a lower
reporting threshold than in previous years, but it does not change what income is taxable. The
IRS advises taxpayers, particularly those filing early in the season, to be sure they have all of
their income documents before filing to prevent the need to complete an amended return.
The IRS also advised taxpayers that their refunds may be less than in previous years due to
credits such as the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and
Dependent Care Credit all returning to 2019 pre-COVID amounts. However, the eligibility for
other credits, like the Premium Tax Credit, has expanded. Finally, the IRS is no longer allowing
taxpayers who take the standard deduction to take an above-the-line charitable deduction, as
had previously been allowed during COVID. Taxpayers should be aware of all of these changes
to ensure their 2022 return is completed accurately.

The IRS then offered more general advice for taxpayers in advance of filing. First, taxpayers
should understand the timing of refunds and how to avoid delays. A number of factors can
affect the timing of a taxpayer’s refund, so the IRS generally warns against relying on receiving a
refund by a specific date. For example, taxpayers claiming the EITC or the Additional Child Tax
Credit (ACTC) cannot be issued a refund prior to mid-February, no matter how early they file.
To prepare for filing, the IRS advises that taxpayers gather all of the necessary documents to
avoid errors on their return. Taxpayers should also be aware that the last quarterly payment for
estimated or additional tax payments for 2022 is due on January 17, 2023. Finally, for easier
filing and a faster refund time, the IRS also recommends that taxpayers sign into their online
account with the IRS and that they choose to receive their refund by direct deposit.
If you have concerns about the upcoming filing season and wish to seek legal assistance, you
can reach out to the Low Income Taxpayer Clinic by calling (812)-339-7668.

For the full information given by the IRS on the 2023 filing season, visit here:

Megan Burtis,
Low Income Taxpayer Clinic Law Clerk