2023 Filing Season Updates
As the 2023 filing season gets into full swing, let’s discuss a few updates from the IRS:
Direct Deposit for Amended Returns
The IRS announced it will now provide the option for direct deposit on 2021 and 2022 amended returns. These returns must be filed in calendar 2023 (or later) to apply. It should be noted that if you need to make a correction to your 2022 return, you still have time to file a superseding return, rather than an amended return. These are often easier to file and will not take as long to process.
Upload Documents to Respond to IRS Notices
The IRS has unveiled an option that allows taxpayers or their tax professional to electronically upload documents related to an IRS notice, rather than mailing them to a service center. This option is currently only available to certain notices regarding the Premium Tax Credit, Child Tax Credit, Earned Income Credit, and certain refund-related issues (click here for a complete list). If you receive an eligible notice, you will see the option to send your documents via secure upload. There is planned expansion to address additional notices in the future.
I am interested in trying the upload tool to compare its efficiency to mailed documents. If anything, the thought of knowing the IRS received a response with a digital paper trail is a good start.
Many Special State Tax Payments Not Taxable
Most of the tax rebates and relief issued by states in 2022 will not be subject to federal tax. However, certain payments, such as the California Middle Class Tax Refund, generated Form 1099-MISC. This does not mean it is taxable, but it should be noted when completing your return. If you received this form, speak to your tax professional to ensure it is reported correctly.
If you have not been in contact with your tax professional, or are searching for a new one, I would highly recommend doing so quickly. As the filing season progresses, availability will begin to diminish (it’s already quite low) and you want to make sure you are on their radar.