Getting Ready To File Your Taxes in 2023

Preparing for filing your 2022 Tax Return

Soon businesses and individuals everywhere will be turning their attention to filing 2022 taxes. As an individual or business owner in Tennessee, it's important that you get organized early in order to ensure your filings are in order and on time. Preparing ahead of time can help you minimize stress surrounding tax season, as well as make sure that no deadlines are missed – or worse, that penalties for late payments or incomplete documents aren’t incurred.


Benefits of Filing Taxes Early

Filing your taxes early can be beneficial for many reasons but most importantly it gives you more time to review your return and double-check everything before submitting it. Additionally, filing sooner rather than later may provide an opportunity for faster refunds if applicable or could give you access to other incentives or benefits depending on the type of deductions or credits taken during the year. Ultimately though, no matter when you decide to file just be sure that it is done by a professional so that there are no issues down the road! 


Here we’ll look at nine ways to start preparing for 2022 taxes now so you can relax come April 15th!

1. Gather Your Paperwork.


The first step in preparing your tax documents for 2023 is to gather all of the necessary paperwork. This includes any tax documents from the past five years, such as W-2s and 1099s, as well as mortgage information, investment statements, bank statements, etc. It’s a good idea to compile these documents into one folder so they’re easily accessible when needed. You should also be sure to keep track of any new or changed deductions you plan on taking in the upcoming year as well.


Gather all of your necessary financial documents, such as W-2 forms, 1099s, and other income details like capital gains or dividends.

Know whether or not you need to file a state return in addition to a federal one. For a comprehensive list of what you need, visit Yahoo Finance here.



2. Consider investing in a good tax software


Filing early is only possible if you have complete bookkeeping reports available at the start of the new year. When it comes to filing taxes, there are many great software options out there that make it easier than ever before. With these programs, you can upload all of your necessary paperwork and quickly navigate through your taxes with minimal effort required from you. Plus, many of these programs offer additional features such as free credit score tracking and automated budgeting capabilities which can help simplify your life even more! Be sure to do some research into the different types of software available so that you find one that best suits your needs. If you want to outsource bookkeeping to a professional tax service, contact us today about your options.  


3. Understanding Changes to Local and Federal Tax Codes


Understand the changes to the tax code for the 2022 tax year and how it will impact the information you need to share with the IRS. Familiarize yourself with any new deductions, exemptions, or credits that may be available to you. Visit these links to learn more about the changes to tax cuts in Tennessee or the biggest federal changes to know before you file. 


4. Know Your Deductions


Determine if you are eligible for any deductions such as the Employee Retention Tax Credit (ERTC) which can credit you up to $26k per employee, earned income credit, child tax credit, or other potential refunds or credits based on your personal circumstances. Consider what filing status best suits your personal situation (such as single, married filing jointly/separately). Knowing what deductions are available can help reduce your taxable income and save you money during tax season. As a business owner, there may be more deductions available than those for individuals; so make sure to research what deductions can benefit your business before filing your taxes. Common business deductions include home office expenses, advertising costs, travel expenses, insurance premiums, and equipment purchases.


5. Understand Deadlines and Penalties


Review the IRS publications and IRS website for guidance on how to complete and submit your taxes accurately and timely with no errors or omissions in order to avoid penalties and interest charges that may be associated with late filings or incorrect information provided.


6. Gather purchase and donation receipts


Make sure to keep all of your receipts from purchases made throughout the year that can be used as evidence when filing taxes; this includes medical expenses and charitable donations made throughout the year which may qualify for deductions when filing taxes in 2023.


7. Pay estimated quarterly taxes


If you are not already paying estimated quarterly taxes, speak to a tax professional to discuss how this can benefit you. Calculate your estimated quarterly payment if you are self-employed or running a business so that you don't end up owing a large amount of taxes at filing time due to inadequate payments during the year prior to your return date in 2023.


8. Understand local taxes and fees


Factor in any additional taxes and fees such as local municipality taxes and business license fees applicable where applicable depending on where you live and work presently. This information will help ensure you have paid off any costs incurred during the current tax year prior to filing in April 2023 so that there are no surprises after filing day arrives. Our offices can help you understand local Tennessee taxes and fees and are based in Dickson, Tennessee and Chattanooga, Tennessee.


9 Hire a Professional


Finally, explore all available options including tax filing services offered by Stephen Wallick & Associates so that you can take advantage of accurate electronic submissions with ease for both individual and business returns. Contact us by phone or email today to receive a free consultation.


You May Qualify for a Filing Extension

When it comes to filing taxes, being aware of IRS deadlines is essential. Filing a tax extension can be a viable option if you're unable to meet the deadline. Generally speaking, the deadline for individuals to file their tax returns or request an extension is April 15th. For businesses, the deadline tends to be March 16th. In some cases, such as with fiscal-year taxpayers, different deadlines may apply and should be discussed with a qualified tax professional.


If you need more time to complete your return, you can request an extension using Form 4868 by the original due date of your return. The form is available online and in most tax preparation services software packages. Once approved, this will give you an additional 6 months beyond the original filing deadline, which means that individuals must file their returns no later than October 15th, and businesses by September 15th. Please note that requesting a tax extension does not give you extra time to pay any taxes due; payment is still due on the original due date of April 15th for individuals, or March 16th for businesses.


It’s important to keep in mind that filing an extension only gives additional time to file your return – any owed taxes must still be paid on or before the original due date in order to avoid any penalties or interest charges from accruing. Stephen Wallick & Associates can help ensure that all required documents are filed properly and on time so that taxpayers don’t have to worry about missing any important deadlines or having any issues with the IRS. Contact us today to speak about filing extensions and preparing to file your 2022 tax return. 

Expert Tax Advice for Business Owners from Stephen Wallick & Associates

By Stephen Wallick • February 1, 2023
Expert Tax Advice for Business Owners from Stephen Wallick & Associates

New Office Opening in Chattanooga: Jonah Wallick to Lead Tax Services for Local Businesses

By Stephen Wallick • January 20, 2023
New Branch of Stephen Wallick & Associates in Chattanooga, TN

How Do Unpaid Taxes Affect Your Credit Score?

October 20, 2021
Your credit score after unpaid taxes Even after you have paid the IRS, your credit record is still damaged to the point that everything except cash purchases costs you more. Believe it or not, Federal Tax Liens show on your credit record even after they are released. This means they still hurt your credit score It’s true that they will issue a release that you can have posted to the credit record that shows the tax has been paid, but because you have had a lien in the past your credit score is much lower than it should be. There is another procedure that can even remove all references to the lien from your credit report once we have satisfied the outstanding tax liability. Credit scores usually improve dramatically. Many taxpayers have been able to have IRS reduce the penalties. For taxpayers who don’t file an Offer In Compromise – We can help with a request to the IRS to Abate the IRS penalties for “Reasonable Cause.” This can be as simple as explaining to the IRS that your basement flooded. It’s a great way to drastically reduce the total amount you owe the IRS. Many taxpayers use our firm to keep the IRS away from them and their families. Most of our clients never meet or speak with the IRS. We make the IRS call us, so our clients can go to work and carry on a normal life. If you are looking for a solution to your tax problems and want to get your life back, contact your Middle Tennessee tax resolution experts . We specializes in ending the misery that comes along with your IRS problems.

End IRS Problems Now

October 19, 2021
I’m sure you have heard of IRS programs where you pay less than you owe. How much less? Well, if you qualify, A LOT LESS! The IRS looks at these old tax liabilities and knows they will not collect most of them. So, they have set up this great program called Offer In Compromise. This program allows taxpayers to pay what they can afford regardless of the amount the IRS says they owe. The Offer Program requires the total amount owed to be included in the settlement. Therefore, once you qualify and have an accepted Offer, you are completely paid up and your tax problems are finally over. And, even payroll taxes can be settled this way. When I say Settle Up, I mean completely, 100%! Once the IRS has accepted the amount you offer and you pay the reduced amount, then the IRS releases all Federal Tax Liens. Your IRS nightmare is over and you get your life back. Your IRS problem will not go away by itself. You only have three choices to end your IRS Nightmare. You can do one of the following: Pay the IRS 100% of What They Think You Owe Today. Set up a Monthly Payment Which Never Goes Away Due to the Additional Penalties and Interest That Continue to Add Up. Reduce the Total amount Owed to an Affordable Number and Get on with Your Life! If you are looking for a solution to your tax problems to get your life back, contact your Middle Tennessee tax resolution experts . We specializes in ending the nightmare of your IRS problems.

Why You Should Never, Ever Pay Early (With One Exception)

October 19, 2021
Much has been written about the struggles business owners face to get paid on time, and how to get clients who are dragging their feet to pay up. Clients stalling on payments, combined with unexpected expenses, can put your business in a cash flow crunch. As the owner of a small business, you probably have experienced watching the mailbox each day for a payment that’s overdue, even as you pay your own bills and invoices upon receipt. If so, what I’m about to tell you may seem stingy, scrimpy, or downright tight: Never pay early. You won’t always have control over when you get paid, but you do have some leeway when it comes to when you pay your own bills. Apart from the fact that you are a nice person and may feel a need to make people happy, why would you pay early? What benefits are being derived? The harsh reality is that unless there is a clear, compelling reason for making early payments to anyone (cash discounts, pricing discounts, special delivery arrangements), DO NOT do it . Hold on to your cash as long as you possible can by closely managing accounts payable. Hold on to your cash. Take as long as you possibly can to pay your company’s bills without incurring late fees or impacting your ability to operate. Having said that, carefully manage your communications and relationships with your vendors. Normally, your vendors will have terms established for the payment of their invoices presented for the delivery of their respective products or services. In order to maximize cash flow, you should attempt to extend the payment a minimum of a week or two beyond those established terms. So here’s the ONE Exception… Certainly, if sufficient cash is available to meet the other obligations of your company, you should take full advantage of any and all cash discount opportunities. The relative returns from cash discounts are usually quite significant and are well worth the extra effort required to manage shorter payment timeframes. For example , assume a vendor offers a 2% cash discount for payments received within 10 days as opposed to the normal 30-day terms, and your company’s standard payment cycle would dictate that payment be made in 40 to 45 days. By making the payment within the discount terms you are losing the use of the funds at least 30 days sooner than would otherwise be the case. However, your company realizes a 2% return for the use of those funds over the one-month period, the equivalent of a 24% annual return (2% x 12 months). There are very few investment opportunities that offer such attractive returns with the certainty of a cash discount. This is obviously one of the clear and compelling reasons for paying early. Consult an experienced Enrolled Agent for more advice regarding your small business expenses. 

Credit Myths and Misconceptions

October 19, 2021
There’s a ton of information out there and most of it is wrong. There’s information about how your credit score is calculated and even worse… how it is impacted by you simply being a consumer.  Let’s look a few of these and try to dispel them Your score drops if you check your own credit . This widespread credit misconception fools a lot of people, but viewing your own report and score is counted as a “soft inquiry” and doesn’t change the score one way or another. “Hard inquiries” by a lender or creditor, such as those resulting from your applying for credit, can slightly lower your credit score. If you’re shopping for a loan and concerned about harm to your score, know that multiple loan inquiries within a period of a few weeks are usually treated as a single inquiry to minimize impact. It helps to close old accounts . This credit myth advocates closing old and inactive accounts to hike up your score. However, this might inadvertently have the opposite affect and lower your credit score because now the credit history appears shorter. If you don’t trust yourself to put a card away in a safe place and not use it, then consider canceling newer accounts. Paying off a negative record means it’s taken off your credit report . Generally, negative records, such as collection accounts and late payments, will remain on your credit reports for up to seven years from the date of first delinquency. Paying off the account sooner doesn’t mean it’s deleted from your credit report; instead it’s listed as “paid.” Of course, it’s smart to pay your debts, both to reduce the total amount of debt you owe and to show your willingness to repay your obligations but expect the negative record to have some effect until it is purged from your report. Co-signing doesn’t mean you’re responsible for the account . Regardless of this credit myth, if you open an account jointly or co-sign a loan, you will be held legally responsible for the account. Activity on the joint account is displayed on the credit reports of both account holders. If you co-sign for a friend’s auto loan and that person doesn’t make the payments, your credit profile will be hurt and vice versa. The only way to end the dual liability is to have one party refinance the loan or persuade the creditor to formally take you off the account. Paying off a debt boosts your score by 50 points . Contrary to this credit myth, credit reporting agencies companies determine your credit score via a complex algorithm that uses hundreds of factors and values to calculate it. It’s almost impossible to calculate the difference in points changing one factor might make. It’s wise to pay your bills on time, work to lower your debts and ask that any inaccuracies be corrected. A proven record of sound financial behavior and time will have the most significant impact on your score. No matter what your score is, the smartest thing you can do with respect to your credit is simple, keep a strong record of on-time payments, keep your credit card balances below 40% of your credit limit, and make sure that the items on your credit score are correct. Anything and everything else is too hard to manage. Consult an experienced Enrolled Agent for more tips on how to repair your credit score.

4 Steps to Take When You Get an IRS Notice

October 19, 2021
Few things can be as intimidating as that letter from the IRS. In many cases, though, those notices are just meant to clear up some missing information. Although there’s no need to panic, it is important to respond as quickly as possible to avoid accruing costly penalties . How you respond to the letter depends on the type of letter you received. You may be notified that you have a balance due, or you may simply need to answer a couple of questions. Here are a few steps to take after that IRS notice appears in your mailbox. Make Sure It’s Legitimate Fraud has become an increasing problem for the IRS. If you’re being asked to remit payment, check out the IRS’s instructions on remitting payment . Your check will be made out to the United States Treasury, and the IRS won’t demand payment immediately without allowing you the option to appeal. If you have any doubts about a notice you’ve received, call the IRS at 800-829-1040 to verify its legitimacy. Comply with the Request The best thing about an IRS notice is that it usually tells you exactly what you need to do next. If you agree with what they’re requesting, you’ll merely need to comply. This means if you owe money, you’ll remit a check to the address on the notice. Make sure you keep a copy of the notice with your tax records. Work Out a Payment Plan The IRS is aware that not everyone can afford to pay an unexpected tax bill. There are a variety of payment options available, including short-term and long term plans that let you pay in a series of installments. You’ll have to qualify for the plan and pay a setup fee, but you can get the process started by applying online. Dispute the Request Don’t assume that the information you’re getting from the IRS is correct. Check your own files and, if you find a discrepancy, file an appeal. Information on your right to appeal should be on the notice you receive, but you’ll send your request in writing to the address on your notice. A written notice from the IRS is nothing to fear. The agency occasionally needs to communicate with taxpayers to clear up questions or resolve underpayments. As long as you follow the instructions on the letter and check your own records to make sure the notice is correct, you should be able to resolve the matter to everyone’s satisfaction.

How Can I Get Rid of a Federal Tax Lien?

October 19, 2021
 If you owe money to the IRS, the agency can eventually levy a federal tax lien on your home or personal property. When you try to sell the asset, the IRS will collect its money before you get your share. In many cases, though, you’ll have trouble making that sale as long as the lien exists on it, forcing you to try to get the lien removed beforehand. Getting a lien removed isn’t always easy, but it can be done, provided you have the money to clear things up. Resolving Your Tax Issue The first step toward having a federal tax lien removed is to pay the IRS what you owe. If you believe that the finding was in error, you can go through the appeals process, but this can take time. If you owe the debt, you may be able to work out a payment arrangement , but you’ll still have to pay off the entire amount before the lien is released. The good news is, you can possibly resolve this by filing Form 12277 to request withdrawal of the lien, which will allow you to have it pulled while you’re making payments on it. Removing a Lien on Your Home Once your debt is paid in full, the IRS should file a Certificate of Release of Federal Tax Lien with the authority that holds the lien. After a short time has passed, you should follow up with the appropriate authorities to make sure the lien is no longer on your property. If you’re selling your house, the title company will perform this search before the sale can go through, so it’s important to make sure it’s been cleared before putting your property on the market. Clean Up Your Credit Unfortunately, your property isn’t the only thing you have to worry about. A tax lien can damage your credit score. Paying it off doesn’t always clear that up, either. It’s important to pull a copy of your credit report at least 30 days after you’ve paid off your tax debt to make sure it’s been removed. If not, you should be able to contact the credit bureau in question and dispute the listing . A tax lien can be a temporary setback, but as long as you know the steps to take, you can have it resolved. If you believe the lien is in error, it may help to work with a tax professional to discuss what options you have. You may be able to work with the IRS to resolve any misunderstanding that might have led to the lien.

Enrolled Agent vs. CPA for IRS Tax Issues

October 19, 2021
When you get one of those pesky IRS notices in the mail, your first response may be to panic. One quick call to your tax preparer, though, and you’ll likely get the peace of mind you need. A large part of that peace of mind comes from knowing you’re in good hands with your tax preparer, particularly if you see either CPA or EA after that professional’s name. But while you may be familiar with Certified Professional Accountant, EA may be new to you. An IRS Enrolled Agent is licensed by the federal government to represent taxpayers in front of the IRS. A CPA, on the other hand, is licensed at the state level. Both types of professionals can stand in front of the IRS on a taxpayer’s behalf, but the requirements and type of licensing set them apart. Requirements for EAs vs. CPAs To become licensed as a CPA, an accountant gets a college education, then passes the four-part Uniform Certified Public Accountant Examination , administered by the state. Although there are plenty of CPAs who practice tax law, landing that credential doesn’t necessarily mean they will. CPAs often focus on business auditing and bookkeeping. An IRS Enrolled Agent passes a three-part test called the Special Enrollment Examination , which focuses on tax laws and issues. An EA doesn’t necessarily have an accounting background and may simply focus on tax preparation. Some IRS EAs will also develop a legal specialty, which comes in handy when navigating complicated tax laws. Tax Problems and Representation If you’re ever subjected to an audit, it’s important to make sure you have either a CPA or EA to represent you. In many cases, your representative will merely need to help you gather the documentation necessary to answer the IRS’s questions. However, if it comes down to an audit, either a CPA or EA will have the expertise necessary to stand in front of the IRS. One benefit of working with an EA, though, is that your professional can represent you in a court of law in any state. This is because this tax person is licensed by the federal government. A tax attorney, on the other hand, is licensed only to practice law in that state. A CPA is a great help when it comes to accounting and bookkeeping, but an EA is better once a person’s taxes get to the auditing phase. When it comes to filing your taxes, it’s important to know you’re working with the right person. While a CPA is great for bookkeeping and business auditing, the best person to represent you if you find yourself in an auditing situation is an enrolled agent, at which point the tax specialty comes in handy. For a free consultation, please visit my online calendar .

Protecting Yourself From Tax Collection Scammers

October 19, 2021
There’s no shortage of frauds and scams out there, especially those designed to steal your payment information or passwords. Taxes are a prime target, with criminals well aware that the IRS collects information that could be used to steal your identity. With just a Social Security number and your contact information, a criminal could apply for a credit card on your behalf. Realizing the dangers these threats pose, the IRS has taken measures to protect taxpayers, but there are still things you, the consumer, need to do to keep yourself safe from scammers. Here are a few tips to help you get started. Know How to the IRS Communicates The IRS makes clear that it will not call, text, email, or use social media to communicate with taxpayers. If you get any correspondence from the IRS, it will come in the mail, on IRS letterhead. And even then, you should contact the IRS at 800-829-1040 between 7 a.m. and 7 p.m. if you have questions about the mailing you’ve received. There are rare instances where the IRS may call or show up at your home, but at that point you’ll have received multiple notices in the mail about the issue. Be Careful How You File With e-filing having overtaken paper-based filing, more taxpayers than ever are using online sites to submit their taxes. You probably have heard some of the most popular online tax preparation services, but scammers can easily set up a website, copying the design of the original site, and trick taxpayers into providing their information. If you do use an online service, make sure you go directly to the site itself rather than clicking on a link in an email. Avoid Tax Resolution Fees If you’re in hot water with the IRS, it can be tempting to consider those services that promise to resolve all your problems. Unfortunately, these services also often charge exorbitant fees. Many of the services they offer are things you can do yourself, such as setting up installments or making an Offer in Compromise. The IRS provides information on all of this on its website , but you can also ask your own tax preparer to explain your options and help you navigate the process. Tax collectors don’t limit their scams to tax season, so be sure to be on alert year-round. If you do suspect someone has tried to scam you, report it to the IRS as soon as possible so they can keep an eye on your account and take measures to protect others.
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