February News To Know
Dear Clients & Friends,
This year’s tax season is well underway, and we are busy working on your tax returns for 2022. To that end, we have some useful information to share in this month’s newsletter.
Firstly, if you haven’t already, it’s time to organize and send us your tax documents. As a reminder, we require that individuals send us all their documents by March 20 to be able to meet and timely file your tax return by the due date and to avoid filing an extension. (Business client deadlines are sooner, so if you are a business client, please reach out to your CJBS team member to plan accordingly.)
Secondly, our Client Collaboration HUB is up and running for our individual clients and ready to help you make the process of getting your documents to us easier.
It’s important to gather all of the information you’ll need to optimize your tax filing. If you would like a reminder of what documents to send, our tax organizer will help. You can find this year’s organizer in the Client Collaboration HUB.
Other highlights in this month’s newsletter include:
- Updates and changes to the SECURE Act (new SECURE ACT 2.0)
- A recent request by the IRS to delay filing if you received a state tax refund in 2022
- Risks of tax identity theft and benefits of filing your taxes early
- Important tax dates and reminders
SECURE Act Updates—In 2022, the Senate Finance Committee updated the original SECURE Act to the new SECURE Act 2.0. This update specifically addresses: automatic enrollment, changes to long-term, part-time worker coverage, catch-up contributions, student debt contributions, “starter 401(k) plans, and tax credits for pension plan startup costs for small employers. To learn more about these significant changes, click here.
IRS Requests Certain Individuals Wait to File—According to a recent article by NBC-5 Chicago, the IRS has requested that certain individuals wait to file their taxes. This is because the IRS is not 100% sure how to address state-based refunds received in 2022. In order to prevent individuals from having to file an amended return, they are asking people to delay their filing. If you received a “tax refund from your state in 2022, the IRS is recommending you hold off on filing your tax return until the agency gives further instructions.” You can read the full article here.
Benefits of Filing Early—State refunds notwithstanding, filing your tax return earlier may help to prevent tax identity theft. Potential thieves have learned to claim refunds that aren’t theirs by filing a tax return early using somebody else’s tax filing information. The unknowing suspect only learns of the theft when they file their own tax return and find that it is rejected by the IRS. Filing early prevents this. Additionally, filing early means any refund will be sent sooner. The IRS currently expects a 21-day return on refunds if you file electronically with direct deposit. (If you choose to file a paper return, you’re looking at four weeks or longer.)
IRS Status Updates—Thankfully, the IRS is clearing out its backlog of returns. According to this recent Forbes article, it has whittled its original backlog of 8.3 million returns (as of January 2022) to 2.04 million returns as of December 30, 2022. With more staff and fewer restrictions, this trend should continue.
1099s—If you are a contract worker and have not received your 1099 yet, reach out to the company providing it ASAP. All 1099s should have been sent out by January 31, 2023. You cannot file your taxes until you have received your 1099s.
As always, we’re happy to answer any questions you might have. Please contact us today.
Stay safe & healthy,
The CJBS Team