As the tax filing season kicks off this year, a considerable number of taxpayers are gearing up to file their returns, with many relying heavily on anticipated refunds. According to a recent survey conducted by Credit Karma, nearly 40% of individuals surveyed expressed their dependence on tax refunds to navigate their financial situations. This statistic underscores the critical role that tax returns play for countless households, especially as they ready themselves for potential economic uncertainties. The Internal Revenue Service (IRS) is preparing for a significant workload, anticipating over 140 million individual tax returns will be filed by the April 15 federal deadline.
Exploring Free Filing Options
For those keen on minimizing their tax preparation costs, several free filing alternatives are available for the 2024 tax season. The IRS has expanded its Direct File program, which, as reported by former IRS Commissioner Danny Werfel, now extends to 25 states and accommodates a broader range of tax situations than in previous years. The estimated 30 million taxpayers potentially eligible for Direct File may find this route not only cost-effective but also efficient.
Additionally, the IRS Free File initiative provides guided tax preparation software at no cost for individuals with an adjusted gross income (AGI) of $84,000 or less. Alarmingly, while about 70% of taxpayers are eligible for this option, only a small portion actually utilize it. This gap highlights a unique opportunity for many filers who may overlook the benefits available to them. Another route for cost-free tax assistance comes from the IRS’s Volunteer Income Tax Assistance (VITA) program, designed for those with an AGI of $67,000 or less. This program offers invaluable help for filers who need guidance when navigating their obligations.
While April 15 serves as the general deadline for most taxpayers, certain groups—including the victims of natural disasters like the recent California wildfires—may have extended deadlines to ease their tax filing pressures. The IRS has laid out a comprehensive schedule of tax relief measures, which contributes to the understanding that not all taxpayers are treated equally when it comes to filing requirements. Additionally, Congress has enacted tax relief provisions for individuals affected by federally declared disasters stretching back as far as 2020, allowing for potential deductions on losses incurred as a result.
The eagerness to file early can often cloud judgment when it comes to ensuring all necessary documents are in order. Certified public accountant and senior tax advisor Brian Long has advised that a meticulous approach is essential to avoid unnecessary delays caused by missing or incorrect information. It is prudent for taxpayers to use their previous year’s tax return as a reference tool to double-check accuracy before submitting their new filings.
Even though many tax documents typically arrive in January, several forms may not be sent until mid-February or later. Taxpayers should be proactive in ensuring that they have received all necessary paperwork before they rush to file. This careful attention could save them both time and headaches in the long run.
As the 2024 tax season unfolds, it is evident that diligence and preparation are paramount for taxpayers. By understanding the variety of options available for filing, acknowledging deadlines that may affect their submission, and ensuring all documentation is complete and accurate, individuals can navigate this often-complex period with greater confidence. Armed with the right resources and knowledge, filers can maximize their chances for a smooth process, securing the refunds they anticipate and stabilizing their financial footing in the year ahead.