Tips and ideas for an easier 2023 tax season: 2022 tax season lessons learned

December 22, 2022

As 2021’s tax filings fades into memory, there are some important takeaways for the upcoming tax season.

“Disrupted” best describes today’s tax landscape. Various temporary, COVID-19 related provisions are expiring. At the same time, the IRS and various state revenue departments are employing technological aids to contend with the ongoing backlog of paper mail and allow taxpayers easy online access to their information.

The following points lay out some lessons we have learned in this ever-changing landscape that are worth considering when gearing up for your 2022 filings:

Create online tax accounts with the IRS and WI Department of Revenue

The IRS and the Wisconsin Department of Revenue are still working through significant mail processing backlogs due to the COVID-19 pandemic and associated work-from-home orders for governmental employees.

Because of this, many pieces of mail are still delayed in being opened, resulting in confusion from clients and erroneous assessment of penalties and interest.

One way to work around dealing with traditional mail is to create online accounts with both agencies. Doing so can allow you to access your previous tax records, view balances due, manage communication preferences with the taxing authorities, and pay your tax bills (more on that below) using the most up-to-date information. For more information, visit:

• IRS: https://www.irs.gov/payments/your-online-account

• WI Dept. of Revenue: https://www.revenue.wi.gov/Pages/home.aspx

• Pay your tax bill online rather than by mail

Didn’t get a refund on your taxes? Consider paying your amount due online.

The delays in mail processing mentioned above can include payment checks sent, so the IRS and the WI Department of Revenue have introduced options to pay amounts due online, allowing guest payments without needing to create an account. In addition to tax return filing payments, both systems allow estimated quarterly and extension payments.

Be aware of the change in charitable contributions benefits

Besides the sense of well-being from contributing to a nonprofit organization, you can also list charitable contributions as part of your itemized deductions on your federal tax return.

Over the past two years, a temporary provision allowed taxpayers who did not itemize their deductions to receive up to $300 in tax benefits ($600 if married filing jointly) for charitable contributions.

This benefit is no longer available starting in 2022, meaning that for this year’s taxes and beyond, only taxpayers who itemize their deductions can deduct charitable contributions.

Be aware of the change in Child Tax Credit payments

In 2021, a temporary Child Tax Credit provision granted parents up to $3,600 in federal tax credit per child, half paid in advance from July – December 2021 and the other half when claimed in the 2021 tax return itself.

Starting this year, parents will no longer receive direct, monthly payments relating to the Child Tax Credit. Parents can still claim up to $2,000 per child who qualifies for the Child Tax Credit on their 2022 tax return.

Put your tax refund into perspective

When undertaking tax planning, it is essential to realize a “tax refund” is really an interest-free loan of your tax withholdings to the IRS.

Although getting a large, lump-sum payment may feel good, reducing your tax payments throughout the year and getting a lower refund (or even making a small payment) may be more beneficial. Instead of sitting in an IRS account, you can invest the money and get a positive return.

Salaried employees can complete Form W-4 and furnish it to your employer to reduce withholdings. If you are a business owner, speak to your accountant about making the proper Safe Harbor estimated tax payments based on your projected income to avoid any underpayment penalties while still not paying more than necessary per quarter.