Tax Deadline 2023: Everything You Need to Know for Stress-Free Filing

Tax filing season will kick off before you know it. Individuals and businesses must start thinking about their tax filing strategy soon.

Knowing the tax deadline for 2023 will enable you to avoid penalties from the IRS and increased audit risk. Preparing your taxes well in advance ensures you don’t miss out on any tax credits available.

Be sure to follow the rules and have a stress-free tax filing season.

When is the Last Day to File Taxes in 2023?

Tax Day is the federal filing and payment deadline for the tax season. So, when is tax day in 2023?

The last day to file taxes for 2023 is April 15. The tax deadline for 2023 is what most employees will need to know to file their taxes promptly.

However, if you are classified as self-employed or an independent contractor, you will need to be mindful of paying your estimated taxes for the 2022 tax period. Four deadlines throughout the year will require you to make tax payments.

Generally, they fall in the middle of April, June, September, and January. If this is your first year filing as self-employed, the IRS will not impose any penalties for missing these deadlines.

Failure to pay enough in estimated taxes will mean facing interest, or a penalty payment, come April 15, 2023. However, it also works in reverse. If you pay too much, the IRS will issue you a tax refund following the tax filing deadline for 2023.

Are There Any Benefits to Filing Early?

Every year millions of taxpayers leave their taxes until the last minute. Knowing can prevent you from struggling to meet or petition the IRS for a filing extension.

Now you know when the last day to file taxes in 2023 is, are there any benefits to filing well before the deadline?

Faster Tax Refunds

One of the biggest reasons people will file before the last day for taxes in 2023 is to receive a faster tax refund.

Deciding to file electronically with the direct deposit method as your chosen payment method is the quickest way to get your refund.

How quickly you get your refund depends on the tax credits you are claiming. For example, there are regulations that state tax refunds from credits like the Earned Income Tax Credit (EITC) cannot be processed before a particular date. These rules exist on certain credits to combat tax fraud.

Typically, the IRS will begin accepting electronic tax returns toward the end of January 2023.

Extra Time to Pay

If you are expected to owe money to the IRS on the tax due date for 2023, there is still a good reason to file your taxes early. If you submit your taxes in the middle of January, you are not required to pay your tax bill until the official filing deadline.

With the 2023 tax deadline not being until April, filing at the earliest possible moment could leave you with an extra three months to pay.

Obtain Financial Insights

Filing your taxes will ensure you have financial insights to support those big decisions in life. If you are sending your kids to college, starting a new company, or buying a new truck for your business, your tax information can show what you can afford.

Your filed tax return can also be supporting documentation if you seek third-party financing.

Avoid a Tax Extension

Filing early means avoiding the need to file an extension. Most extensions are granted due to people failing to manage their finances.

Push the process too close to the deadline, you increase the risk of needing to hire a professional to manage your taxes.

Moreover, if you file for an extension and fail to pay what you owe, the IRS will charge you interest and penalties, regardless of whether you paid in full.

Prevent Identity Theft

Anyone who possesses your Social Security Number can file taxes in your name. Thousands of tax refunds are stolen every year due to fraudulent tax filings.

Most of these crimes happen before most people file their taxes at the beginning of the tax season. Filing well before the tax deadline for 2023 reduces the odds of this happening.

What Happens if I Miss the 2023 Tax Deadline?

Now that we’ve answered “when are taxes due 2023?” There’s no excuse to miss this deadline. But what are the penalties if you fail to make the deadline without filing an extension?

The IRS can issue financial penalties and interest payments on any tax owed. If you pay your taxes late, there is a 0.5% monthly penalty on the total amount owed. The maximum ceiling is 25% of the original amount owed, plus any interest.

While many people may believe this is not a massive penalty, there is another issue. Not filing your taxes by the deadline can mean missing out on any tax credits you are entitled to.

In addition, late filers are more likely to be audited by the IRS, notably if they have consistently filed their taxes late over several years.

Filing an extension is the simplest way to avoid any penalties. Still, if you file an extension, you must immediately pay any outstanding tax due or face penalties.

Key Dates To Meet the Tax Deadline in 2023

Most Americans will need to file Form 1040 and nothing else; however, if your tax affairs are more complicated, such as if you have other investments, you may wonder if there are any separate tax deadlines to account for.

Stocks, equities, and many cryptocurrencies are treated as income, so any profits made will be reported as part of your ordinary Federal income tax return.

With traditional assets, most brokerages automatically send out the relevant forms to file taxes on any income you acquired through your investments. For example, they will typically send you Form 1099B.

If you have alternative assets, such as cryptocurrencies, you may need to report these on your tax return, as these transactions are considered property and taxable income.

You also have state taxes to take into account. Most states have aligned their tax filing deadlines with the IRS, meaning that you will likely have the same deadline as your Federal income tax returns. Most tax accountants and software will file both returns together to reduce the complexity.

Things to Consider Prior to the 2023 Tax Deadline

Preparing your tax returns is far from easy. In the run-up to tax day 2023, there are so many things to consider.

Here are some tips to prepare properly for the tax deadline in 2023.

Start Now

The best piece of advice is to start preparing now to give yourself the breathing space necessary to cover all the bases. Remember that many in-demand tax professionals will have no space in their schedules closer to the tax deadline for 2023, so if you are seeking professional help, start early.

If you find that you have run out of time, make sure you file Form 4868 as soon as you know you will miss the deadline.

Maximize Your Home Office Deduction

More and more Americans have found themselves working from home in the wake of the COVID-19 pandemic. If you have a designated home office space used exclusively for business purposes, you may be able to write off certain expenses.

Calculating the home office deduction means reviewing the percentage of your home the office takes up and deducting the necessary amount.

Eligible expenses can include rent, real estate taxes, and utilities. Claiming the home office deduction can be complicated, so it’s strongly recommended that you seek professional advice.

Have You Contributed to Your Health Savings Account (HSA)?

You can make contributions to your HSA all the way up to the tax filing deadline. Using an HSA has several tax advantages, including:

• Contributions are using pre-tax dollars and will reduce your taxable income.
• Any HSA contributions will grow inside your account and will be exempt from the additional tax.
• All HSA withdrawals are tax-free as long as they are used to pay for qualifying medical expenses.

It is never too late to open an HSA. With the cost of U.S. healthcare soaring, an HSA is an investment that will always result in a positive return in the long run.

Monitor Your Mileage

Mileage for business, medical, and charitable purposes are all deductible for tax purposes. Employees using their personal vehicles for business are typically reimbursed by their employers, but if not, they can claim the mileage on their tax returns.

On the employer side, reimbursed mileage can be deducted as a vehicle expense. Documented business miles are never taxable for the employee.

Note that you will need to ensure that business miles are documented accurately. Solutions like MileIQ can provide you with an accurate readout of every mile driven so that you know you are claiming the correct mileage on your tax returns.

If the IRS decides to audit you, you’ll need to provide paperwork showing how many business miles you drove for that year. Mileage claims are among the most common reasons why individuals and businesses find themselves being audited.

Failing to document your mileage correctly can mean owing the IRS a refund on the mileage credit.

Make More Contributions to Your Retirement Accounts

Like HSA contributions, you can continue to make contributions toward your retirement accounts all the way up to the filing deadline.

Maximizing your retirement contributions is critical to make the most of your tax savings. Tax-deductible retirement plan contributions lower your tax liability for the year, and your money grows within the tax-deferred account.

Not hitting the maximum limit on your retirement contributions every year is essentially leaving money on the table.

Itemize or Standard Deduction?

You can either take the standard deduction or itemize your expenses. As a rule, if your qualified expenses are greater than $12,950 (the standard deduction for individual filers) or $25,900 for married but filing jointly, it’s worth itemizing.

People are more likely to fall into this category if they own their own homes or make significant charitable donations annually.

If you are itemizing, remember that you can also deduct dental and vision care expenses. COVID-19-related expenses also apply, including any purchases of personal protective equipment and at-home testing kits.

In recent years, the doubling of the standard deduction was done to encourage fewer people to itemize their expenses. For most standard employees, the standard deduction has made filing their taxes easier, but if you’ve got complicated tax affairs, the chances are you will be itemizing to minimize your tax burden.

Go Over Your Tax Credits

Easily the most effective way of cutting your tax burden is to claim any state or Federal income tax credits you are entitled to. Unfortunately, millions of dollars are left on the table annually because people are unaware of which tax credits they are eligible to claim.

Your tax credits will depend on your income, any dependents, and activities throughout the year. There’s no easy way of determining whether you are owed a tax credit or how much that tax credit could be worth to you.

Some tax software options will flag you, indicating whether you could be eligible to make a claim, but the best way of ensuring you’ve got everything covered is to speak to a professional. It’s why hiring a tax accountant is considered less of a convenience and more of an investment.

Track Your Mileage the Right Way with MileIQ

The tax deadline for 2023 is your final opportunity to pay your taxes without resorting to an extension. Filing your taxes early offers you the breathing space you need to ensure you’re claiming everything you’re entitled to and have a chance to pay without incurring any penalties.

At Mile IQ, we know how complex it can be to factor mileage into your taxes using the standard mileage rate or actual expense method. Talk to our experts to learn more about mileage logging with MileIQ and how you can benefit from it.

To learn more about the mileage tax deduction and why MileIQ is the best way to log your miles, sign up now.