Thousands of Americans seek out tax debt relief solutions or tax relief services every year. Many enlist the help of tax experts to maximize their returns and file for them.
As we wrap up the summer months, the time is right for resting up, relaxing, and then catching up on everything we’ve fallen behind on — perhaps including taxes for 2022. The April filing deadline has passed, but that doesn’t mean you can’t find tax solutions that will work in your favor and rectify your tax situation.
Learn more about the most common issues taxpayers come across and some new tax changes that will apply for 2023 below.
Common Tax Issues
Since every person’s tax situation is unique, there are many different issues that can arise. Below, we’ll go over some of the most common types of tax issues to expect in 2023.
Not Understanding How to File
Taxes are complicated. Filing them isn’t as simple as stating what you earned throughout the year. You’ll often need to provide lots of details to determine your eligibility for credits and deductions. If you’re not sure how to file, it’s advisable to consult with a tax expert.
Complex Tax Situations
Taxpayers often face complex situations that make filing their taxes much more complicated. For instance, if you receive income internationally or are self-employed, filing your taxes will be even more of a challenge. You may have to research international tax law and how to file taxes for income from multiple sources. Depending on the situation, you might also need to take out a business license to remain compliant with tax laws in your state.
Missing the Deadline and Filing Late
Typically, one tax problem leads to another. If you’re unsure about how to file your taxes, then you’re more likely to procrastinate and miss the deadline on Tax Day. Even worse, you might have missed out on several years of tax returns.
When that happens, you can end up with a huge tax bill. On top of your tax debt, you’ll likely have to pay late fees and other penalties. If you ignore the IRS, you could get hit with worse consequences like wage garnishment or even criminal charges.
The good news is that tax debt relief options are available regardless of how much you owe. You can get back in the IRS’s good graces by showing you’ll work on paying your debt.
New Tax Issues to Expect for 2023
According to Google Trend data, more Americans have searched for the term “tax help” in 2021 and 2022 than in any other year. The reason is clear, too, considering how many tax changes we’ve all undergone over the past few years.
For one, stimulus checks made things more complicated for everyone. For another, changing tax laws, new tax credits, expanded deductions, new tax extensions, more self-employed individuals, and other issues have all created more complex tax issues across the board. Let’s explore the changes that are most likely to impact your returns for 2023 and beyond.
Prepare for Smaller Tax Credits and Refunds
One of the biggest changes to expect for 2023 taxes is a smaller overall refund, as most tax credits are going back to the level they were at in 2019. That means an overall lower refund for child tax credits, earned income tax credits, and child and dependent care credits.
What is significant, though, is that inflation adjustments created new tax rate schedules that benefit individuals with lower incomes. You may fall into a lower tax bracket this year than you did in years past.
1099-K: What to Know About the New Changes
The most controversial and newsworthy changes to tax laws in 2023 revolved around 1099-Ks and reporting income. In the past, self-employed individuals only had to file a 1099-K when they reached a certain threshold of income from a specific 3rd party. In general, taxpayers would only have to report transactions that exceeded $20,000 or when they received over 200 third-party transactions within a year.
New tax changes, however, reduced that threshold to an unbelievable $600.
The good news, though, is that these changes won’t apply until you file taxes in 2024 for the year 2023. When the changes do go through, taxpayers will have to report every digital transaction that exceeds $600 that is a payment for goods or services. This change will mostly impact small business owners and individuals with good side hustles.
How to Resolve Tax Issues
If you’re experiencing a tax issue described above, then it’s important to consider your options. For every tax problem, there are reasonable tax solutions that can help you get back in good standing with the IRS. Whether you owe a hefty tax debt or need guidance on filing your returns, there are tax relief services that can help.
For instance, you can arrange a payment plan to pay off a tax burden. You can file returns for past years to rectify any delinquencies. You can also make sure to provide all this year’s accurate details to ensure the IRS sees you as compliant.
A qualified tax professional can help you better understand your options, obligations, and rights. The IRS has an incentive to work with you, and they generally won’t pursue collection efforts unless you’re being uncooperative.
Finding a Tax Expert Who Can Help
If you’re currently struggling to handle complicated tax issues, then know that you’re not alone. Thousands of Americans seek out tax debt relief solutions or tax relief services every year. Many enlist the help of tax experts to maximize their returns and file for them.
If you need assistance, don’t hesitate to seek out the help of a professional to resolve your tax issues. Once you’re back in good standing with the IRS, you’ll enjoy greater peace of mind.
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