What do Texans’ taxpayers need to file as new season starts?

In order to prepare their 2022 federal income tax returns, the Internal Revenue Service (IRS) urged taxpayers to take significant actions in December.

This is the second in a series of notes to taxpayers to assist them in getting ready for the forthcoming tax filing season. On Internal Revenue Service (2022) website, a new “Steps to Take Now to Prepare for Your Taxes” page explains actions taxpayers can take right away to make filing taxes in 2023 simpler.

The following are the following factors before Texan taxpayers should contemplate before filing their 2022 federal income tax returns.

First, the Form 1099-K reporting regulations changed. If a taxpayer received payments from third parties for goods and services in the tax year 2022 that totaled more than $600, they are required to receive Form 1099-K, Third Party Payment Card and Network Transactions, by January 31st, 2023 in line to an article published by Dore (2022) via CNBC News.

Income taxation hasn’t changed at all. All earnings, whether they originate from full-time employment, side gigs, or the sale of items, are still subject to taxation. Any income received in the form of a Form 1099-K, Form 1099-NEC, Nonemployee Compensation, or other information return must be reported by the taxpayer on their tax return unless it is specifically exempted by law. Taxpayers should get in touch with the payer right away if any information on the 1099-K is inaccurate. The payer’s name can be found in the top left-hand corner of the form. It cannot be fixed by the IRS.

Collect your 2022 tax documents as the second and final action. Taxpayers should establish a unified record-keeping system, either computerized or paper-based. This includes year-end income records, such as W-2 forms from employers, Forms 1099 from banks or other payers, Form 1099-K from third-party payment networks, Form 1099-NEC for non-employee remuneration, Form 1099-MISC for miscellaneous income, or Form 1099-INT if you were paid interest.

Before filing, taxpayers are reminded avoid errors that cause processing delays by making sure their tax data are accurate. The easiest way for taxpayers to complete an accurate return and prevent processing or refund delays, as well as IRS notices, is when they have all of their supporting paperwork.