Time to file your tax return in 2023 to avoid missing forms

If you want to file your 2022 tax return in January or early February, the IRS has a warning: You’ll need to wait for “important documents” before filing in 2023.

In a release last week, the IRS appealed to “early applicants” Track Form 1099-CZKincome reporting for third-party payment networks like Venmo or PayPal.

“A little extra caution” can save time and effort, the agency saidbecause if you don’t report 1099-K income, you may owe money and need to file an amended return.

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“I recommend waiting until at least late February or early March,” says Albert Campo, a certified public accountant and president of AJC Accounting Services in Manalapan, New Jersey. His reasoning: The deadline for companies to file a 1099-K is January 31.

That means tax preparers should build in a short time frame to allow for late mailing or misdirection.

For example, if you just moved, it’s possible that third-party payment networks still have your previous address on file and send the 1099-K to the wrong place, he said.

Experts say that many Americans will get 1099-Ks for the first time in the upcoming tax season.

Here’s why: Prior to 2022, the federal Form 1099-K reporting threshold was more than 200 transactions totaling more than $20,000. However, the US Rescue Plan Act of 2021 has reduced the threshold to just $600, and even a single transaction can trigger the form.

While the change targets business transactions, such as part-time jobs, side jobs, or merchandise sales, it’s possible that some subscribers will receive a 1099-K for personal transactions. The IRS urges applicants to contact the issuer “immediately” to correct errors or adjust returns.

Phyllis Jo Kubey, a New York-based registered agent and past president of the New York State Association of Registered Dealers, said: “The diligence and accuracy of 1099 reporting- K below the new lower threshold remains to be considered.

“I am concerned that self-prepared taxpayers may not understand what is reported on their 1099-K and why,” Kubey said, noting that reconciliation has been one challenge for many years. “Now, that problem will affect more people.”

When filing a tax return, it is important to accurately report details from all tax forms, such as W-2 from your work, 1099-NEC employment contract templates and 1099-WOOD for unemployment income.

Known as “return information,” these forms are sent to taxpayers by employers and financial institutions annually to report taxable activity, with copies to be sent to the IRS. Your tax return must match these forms, assuming the details are correct.

When the IRS receives your earnings directly from the reporting companies, the system automatically flags returns that don’t match. That’s why it’s better to wait and put in the exact details, experts say. Otherwise, you run the risk of potentially receiving error messages and penalties in the future.

Kubey says it’s easy to miss forms of investment income because many people choose paperless records.

One way to double-check the forms the IRS has received is to log into your online account to view your IRS transcriptshe suggested.

“Unfortunately, the IRS doesn’t release transcripts of taxpayers’ income and wages until the end of the year,” Kubey said. Still, “those transcripts are a great resource for checking for missed tax forms,” ​​including discrepancies in third-party billing statements, she said.