income tax
As the 2023 U.S. tax season approaches, it is essential to be familiar with the latest updates, deadlines, and guidelines provided by the Internal Revenue Service (IRS). This guide covers vital aspects, including Form 1040, necessary schedules, filing requirements, and expert advice for a smooth tax season.
The deadline to file Form 1040 or 1040 SR is set for April 15, 2024. Each tax season begins with the arrival of winter, marking a time when tax filing is an integral part of many Americans’ lives.
According to the IRS, as of May 2023, approximately 134,224,000 tax returns were electronically filed for Tax Year 2022, out of 142,577,000 total returns for 2021.
For the 2023 filing season, taxpayers will use Form 1040 or, if born before January 2, 1959, Form 1040-SR. Depending on individual circumstances, you may also need to complete Schedules 1, 2, or 3.
You must file a return if your gross income meets or exceeds the below thresholds:
| Filing Status | Age | Gross Income Threshold |
|---|---|---|
| Single | Under 65 | $13,850 |
| 65 or older | $15,700 | |
| Married Filing Jointly | Both under 65 | $27,700 |
| One 65 or older | $29,200 | |
| Both 65 or older | $30,700 | |
| Married Filing Separately | Any age | $5 |
| Head of Household | Under 65 | $20,800 |
| 65 or older | $22,650 | |
| Qualifying Surviving Spouse | Under 65 | $27,700 |
| 65 or older | $29,200 |
Even if you do not meet these criteria, it may be beneficial to file a return to claim a refund of any federal income tax withheld or to qualify for certain credits. These credits include:
You must submit your tax return by April 15, 2024. If needed, you can request an automatic 6-month extension by filing Form 4868 before the due date.
Engaging a Certified Public Accountant (CPA) can simplify the filing process, providing you with peace of mind in case of any inquiries from the IRS.
For the 2023 tax year, the standard deduction amounts are as follows:
Before visiting a CPA, gather the following documents:
The maximum federal tax rate on capital gains is 20% for assets held for more than one year. For assets held for 12 months or less, graduated tax rates apply. The thresholds for 2023 are as follows:
| Taxpayer Status | Tax Rate | Income Thresholds (USD) |
|---|---|---|
| Single | 0% | Up to $44,625 |
| 15% | $44,626 - $492,300 | |
| 20% | Over $492,300 | |
| Married Filing Jointly | 0% | Up to $89,250 |
| 15% | $89,251 - $553,850 | |
| 20% | Over $553,850 | |
| Head of Household | 0% | Up to $59,750 |
| 15% | $59,751 - $493,050 | |
| 20% | Over $493,050 |
For 2023, taxpayers will utilize Form 1040 or, if applicable, Form 1040-SR. Depending on your situation, additional numbered schedules may be necessary. Key sections of Form 1040 include:
Includes medical expenses, taxes paid, mortgage interest, charitable contributions, casualty losses, and other deductions.
Breaks down interest and dividends earned.
For business income and expenses, including detailed columns on various aspects of the business.
Used to report gains or losses from transactions and carryovers.
Reports income from various investments and real estate activities.
To report farming income or loss.
Form 1065 is an information return for partnerships that must report income, deductions, and other information. This includes contributions made by partners and the distribution of profits or losses.
Submission Requirements:
Partnerships with over 100 partners are also required to submit electronically.
Filing Deadline: Generally, Form 1065 must be filed by the 15th day of the third month following the end of its tax year.
Form 1120 is used for U.S. Corporations, including specific forms for various types of organizations.
Key Points:
For every tax situation, specific schedules may apply, and detailed filing instructions must be followed.
As tax season kicks off with winter, timely filing is vital for U.S. taxpayers who have contributed to the country’s economy. The tax filing process continues to evolve, attracting top talent and influencing global practices.
Utilize professional assistance from a CPA for your tax preparation and ensure compliance with IRS regulations.