10-Jan-2024 Mastering Tax Season: Your Comprehensive Guide to U.S. Tax Returns [1040 / 1040-SR]

U.S. Tax Returns [1040 / 1040-SR] – Get Ready To File!

With the holidays coming to an end and the tax season approaching ahead, every person required to file federal tax returns will now be in a rush to carry out the annual ritual of tax filings. As it is correctly mentioned “Embarking on a task with promptness is akin to completing half the journey, for in the early strides lies the essence of accomplishment”, it is advisable to commence your filings with thorough preparation to avoid the frantic rush of last-minute tasks.

This article intends to cover some of the common questions that arise concerning return filings and measures to ensure preparedness for the same.

Who is supposed to file the Tax Returns?

A U.S. Citizen and a Permanent resident who works in the United States needs to file a tax return subject to earning a specified limit of gross income based on their filing status (i.e., single, married filing jointly, etc.) 

You must also file a return if you are claimed as a dependent on someone else's return (subject to certain limits) or you are entitled to claiming refunds on account of any tax credits. (e.g., earned income credit, additional child tax credit, etc.)

What is the deadline to file the Tax Returns?

The deadline will be April 15, 2024. For people living in Maine or Massachusetts, the returns can be filed by April 17, 2024, because of Patriot's Day and Emancipation Day holidays. 

Can I apply for an extension to file the returns?

Yes, if you cannot file your tax returns by the due date, you may apply for a 6-month extension i.e., until October 15, 2024, by filing Form 4868. However, taxes owed must be paid by the due date i.e., April 15, 2024, otherwise you will be liable for interest.

When can I start filing my returns?

The Internal Revenue Service (IRS) starts accepting the returns by late January. As in 2023, January 23 was set to be the date for the official start of tax season for 2022 returns.

What are the Tax Rates for 2023?

The tax rates are different based on the filing status of the taxpayer. The tax rates for the most common filing status* i.e., single or married filing jointly are as follows:

*The tax rates for other filing statuses (e.g., head of household, married filing separately, etc.) can be referred to in detail in U.S. Publication 17 (2023) issued on December 20, 2023.

**The tax brackets have jumped by 7% in comparison to the tax brackets of 2022.

Are there any changes in the Standard Deduction in 2023?

Yes, the Standard Deduction amounts have also increased by 7% in comparison to the amounts of 2022. The revised amounts of standard deduction for individuals (other than 65 years or older / who are blind) are as follows:

*For Individuals aged 65 years or older or who are blind, please refer to the aforementioned IRS publication.

What are the steps I can take to make the filing easier?

• Create your online account or access your information at IRS.gov/account to view your taxes owed, make payments, access your tax records, etc.
• Gather and organize your tax records like Form W-2, Form 1099 from banks, Form 1099-K, Form 1099-INT, etc. 
• Check your Tax Identification Number (ITIN). An ITIN needs to be renewed only if has expired and is needed on a U.S. Federal Tax Return. (E.g., ITINs with middle digits 70, 71, 72 etc. have expired) 
• Consider adjusting your withholding if you owed taxes or received a large refund when you filed 
• File returns electronically by choosing the direct deposit option to get the refunds faster

Conclusion:

In conclusion, preparing to file your tax returns is an important annual responsibility that demands careful attention and thorough documentation. If you stay informed about the changes in tax laws, understand the available deductions and credits, adhere to the given timelines, and maintain thorough financial records, you may avoid IRS audits / or will be in a suitable position to handle them in the future. 

P.S.: The above article covers only Individual Tax Return related information (not corporate or other business returns). Also, significant updates in the Form 1040 / 1040-SR shall be covered in the next article.

Thank you Readers for your Time and Attention. If you have any questions or suggestions, please don't hesitate to reach out our Author CA Chirag Goyal on [email protected] and [email protected]. Your input is invaluable.