Tax season is here: What you need to know before filing
AUSTIN, Texas - A new tax season is bringing fresh changes.
Perhaps the most notable change is that qualifying taxpayers can now file directly with the IRS.
"For a long time people have complained that the tax code is so complicated, ‘We have to go through TurboTax and H&R Block and expensive accountants. Why doesn't the IRS have its own system?’" said Andrew Belnap, assistant accounting professor at UT Austin’s McCombs School of Business. "So for the first time they are rolling out the system."
According to the IRS, the Direct File pilot program will be rolled out in phases and is expected to be widely available in mid-March.
Another change comes in the form of tax bracket and deduction adjustments.
"This happens every year, but usually the adjustments are small. But since inflation has been pretty large in the last few years, these tax brackets are moving up pretty substantially," said Belnap. "For example, if you're a married couple filing jointly, you're in the 12% tax bracket in 2022, up to about $84,000 of income. In 2023, that jumps to $89,000 of income."
Congress is also currently considering a $78 billion tax deal that would expand the child tax credit, if passed.
For those seeking outside help to file, watch out for false promises this tax season.
"Anybody that guarantees returns, and this is classic with any kind of investment scam, somebody guarantees you that they can get you a certain amount of money, that's a bit of a red flag," said Mason Wilder, research manager at the Association of Certified Fraud Examiners. "And somebody without much of an official, internet presence. You can always kind of look up a company's business filings and see if it's kind of a fly-by-night thing that just started."
It’s not just your money that is at risk but your PII, or personally identifiable information.
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Identity Theft Awareness Week also starts Jan. 29.
Three of the top ways personal information can be used are credit card fraud, loan fraud and benefit fraud. Benefit fraud could be someone filing an unemployment claim in your name or filing your tax return to get your refund.
Wilder noted that identity theft can happen to anyone, at any time.
"It’s tax season, so it’s top of mind for a lot of people, but it's just incredibly pervasive," he said.
To protect consumers from identity theft, Wilder recommended they use credit cards rather than debit cards, set up multifactor or biometric authentication on accounts and initiate proactive credit freezes.
"If you freeze your credit, nobody else can apply for a credit card or a loan in your name with your stolen information, and you can always very easily unfreeze it," said Wilder.
For most taxpayers, the deadline to file their tax return or request an extension is April 15, 2024.
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