By Kate Dore, CFP* -
CNBC
Six weeks after the start of the tax season, the Internal Revenue Service (IRS) improvements advance with the increase of its staff and new technologies, as part of the investment of 80,000 million of government dollars.
Although the tax filing process could be faster this year, experts say there are key things to know before you file your taxes.
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"Every tax season has its unique challenges," said Mark Jaeger, vice president of tax operations at TaxAct.
There are about six weeks left until the April 18 deadline for most Americans to file their tax returns.
Here's what you need to know if you haven't already.
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Cashbacks could be a little less this season
Although tax season started with a rush of filings this year, early filings have slowed, Jaeger said.
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He added that changes in refunds is the reason why early returns have decreased.
"What we're seeing is repayments go down and more people end up owing the government," he said.
Average returns were $3,079 through February 24, compared with $3.4783 a year earlier, a decrease of 11%, according to the IRS.
Of course, the average can change when there are millions of returns still pending.
A person does their tax return. Witsarut Sakorn / EyeEm / Getty Images/EyeEm
Typically, you receive a federal refund when you have overpaid in taxes during the year or have more withheld than you owe.
The IRS warned in January that refunds this year could be "somewhat lower" than last year due to the expiration of pandemic aid in 2021.
In 2021, many families received a financial boost with the child credit, which represented up to $3,600 for each minor, and up to $4,000 per child and "dependent."
Those tax breaks have returned to their previous levels.
Avoid your return delay with a complete and accurate return
One of the best ways to avoid a delay in your refund is by submitting an accurate and complete tax return to the IRS.
The agency typically sends money to taxpayers within 21 days for error-free tax returns, electronically and with direct deposit for payment.
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However, experts consider it essential to have all tax forms ready before submitting the return.
Employers and financial institutions send tax forms each year, with one copy for taxpayers and one for the IRS.
Any missing information may delay your refund from the IRS."
Nicole DERosa accountant
"If something shows up on a tax return [from an employer or financial institution], the IRS knows what's on the way [from the taxpayer]," said Nicole DeRosa, an administrator at the Wiss accounting firm.
DeRosa stressed that any missing information can trigger a warning from the federal agency, including possible penalties and interest.
You can make a list of the forms you need by reviewing your tax return from the previous year.
If it's still not ready by April 18, you can ask for an extension, Jaeger explained.
But you still have to pay the balance due by the due date to avoid penalties and interest.
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There is a one year extension for the 1099-K report
Whether you're a contract worker or self-employed, making sales
online
or transferring money between families and friends, payments from apps like Venmo and Paypal have become a confusing tax topic.
Although business income has always been taxed, taxpayers and the IRS should not receive a 1099-K unless the 2022 payments were greater than 200 more than 20,000-equivalent transactions.
If you received the form in error, the IRS advises that you immediately contact whoever issued it.
Tax specialists advise including the details of the form in your tax return to avoid an error at the agency.
"If you got one, you should report it," Jaeger said.
Even if you didn't receive a form for 2022, you should include that income on your tax return, DeRosa said.
Kate Dore is a reporter and certified financial planner
