2023 Federal Income Tax Guide
Here is what you need to know about filing your taxes this year.
Filing your federal income tax return can be a stressful and complicated task. Even if you hire a professional tax preparer, you still need to make sure you have all of your ducks in a row.
So we've put together this handy guide to set you on the right path and to prevent you from running around like a chicken with its head cut off when April rolls around.
Of course, you should always consult a professional tax advisor with any questions you may have about filing your return. This guide is intended to be only a handy overview.
Important Dates for 2023
First off, mark your calendar with these important dates for the tax season.
How Early Can You File Your Taxes?
Why file as early as possible? The biggest benefit is that you'll likely receive your refund sooner.
For 2022, you can begin filing on January 23, 2023. The Internal Revenue Service (IRS) will not accept returns filed either electronically or via mail prior to that date.
When Is Tax Day 2023?
You have until April 18, 2023, to file your 2022 taxes or file for an extension. Remember that an extension to file does not mean you don't have to pay your taxes by the due date. You could get hit by late fees if any taxes owed are not paid by April 18.
Who Needs to File a Tax Return for 2022?
Believe it or not, there are some people who are not required to file a federal tax return. In general, individuals or households that don't meet certain income thresholds are exempt from filing. The limit varies depending on factors including age and filing status.
For 2022, you will need to file a federal tax return if the income on your W-2 meets or exceeds the following limits:
- Single and under 65 years of age: $12,950
- Single and 65 or older: $14,700
- Head of household and under 65 years of age: $19,400
- Head of household and 65 or older: $21,250
- Married, filing jointly and both spouses are under 65 years of age: $25,900
- Married, filing jointly and one spouse is 65 or older: $27,300
- Married, filing jointly and both spouses are 65 or older: $28,700
- Married, filing separately (any age): $5
- Qualifying widow(er) with dependent children and under 65 years of age: $25,900
- Qualifying widow(er) with dependent children and 65 or older: $27,300
What if you're self-employed? No matter your age or marital status, you must file if you are self-employed and earned $400 or more during the tax year.
You may also have to file even if you're under the threshold depending on your circumstances, so be sure to check your status on the IRS website. It's also advisable to check with a tax professional to make sure you are exempt from filing.
Further Reading: Should You DIY or Hire a Professional Tax Preparer?
What's Your Tax Filing Status?
If you're single, married or somewhere in between, there's a status for you. Here are the five filing statuses when it comes to federal returns:
- Single: If you are not married or are legally separated as of December 31, 2022, and do not have any qualifying dependents, you must use this status.
- Head of household: If you are a single or legally separated person (or if your spouse did not live at your address during the second half of 2022) and you have a qualifying dependent or child for whom you paid at least half of their support, you are eligible to claim this status. This status has some tax benefits not available if you file as “Single.”
- Married, filing jointly: You can claim this status if you were married as of December 31, 2022.
- Married, filing separately: If you were married as of December 31, 2022, you can claim this status, which usually results in higher tax liabilities (but not always).
- Qualifying widow(er): This status can confer the same benefits as if you were married and filing jointly. However, you must have a qualifying dependent, and you are eligible only if your spouse passed away in 2021 or 2022.
Federal Income Tax Rates and Brackets
There are seven federal tax brackets for 2023: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The bracket depends on taxable income and filing status. There are also different income brackets for the capital gains tax, which you can find out more about here.
|Rate||For Single Individuals||For Married Individuals Filing Joint Returns||For Heads of Households|
|10%||Up to $11,000||Up to $22,000||Up to $15,700|
|12%||$11,001 to $44,725||$22,000 to $89,450||$15,700 to $59,850|
|22%||$44,725 to $95,375||$89,450 to $190,750||$59,850 to $95,350|
|24%||$95,375 to $182,100||$190,750 to $364,200||$95,350 to $182,100|
|32%||$182,100 to $231,250||$364,200 to $462,500||$182,100 to $231,250|
|35%||$231,250 to $578,125||$462,500 to $693,750||$231,250 to $578,100|
|37%||$578,125 or more||$693,750 or more||$578,100 or more|
What Information Do I Need?
Here's a list of some information you'll need to file a federal income tax return successfully. (Not all items will apply to your situation.)
- Your Social Security number
- Your spouse's Social Security number (if you're married)
- Your dependents' Social Security numbers (if applicable)
- Records of Social Security benefits
- Federal and state tax forms from the prior year
- W-2 Forms from all employers you worked for
- 1099 Forms if you worked on contract and earned more than $400
- Investment income information
- Records of rental property income
- Records of business income
- Records of qualified business expenses
- Records of unemployment income
- Records of miscellaneous income
- Records showing charitable contributions and donations
- Records of medical expenses
There could be other paperwork that can help you save even more on your taxes. Consult a professional tax advisor about what documentation you need.
Also, investors have special needs at tax time. Here's a checklist of information investors should gather.
How Do I File My 2022 Taxes?
There are a few ways to file your taxes. You can download and fill out the IRS tax forms and send them in yourself. Or you can file electronically. You may be able to file for free through a qualifying tax preparer, provided you earned less than $73,000. Otherwise, you can file for free if you fill out the forms yourself.
While everyone likes the sound of free, when it comes to filing your taxes, it may be worth paying for the help of an accountant. That's especially true if you have a complicated tax status, own a lot of real estate, or have a lot of investments and capital gains and losses to report.
Also, don't forget to file your state taxes! If you use a tax preparer you can usually have them file your federal and state income tax for you.