Tax News Blog

Standard Deduction for 2023 Tax Year

Posted by admin on March 7, 2024
Last modified: March 8, 2024

Individuals filing their tax returns in 2024 can benefit from a standard tax deduction in fiscal year 2023. Single tax filers are entitled to a standard tax deduction of $13,850, while joint filers can claim $27,700. Heads of household have a standard tax deduction of $20,800 available to them. 2023 Tax Filers who are 65 or older may have a higher standard deduction amount.

When considering ways to reduce your taxable income, the IRS provides two primary options: claiming the standard deduction or itemizing your deductions. Many individuals choose the standard deduction for its simplicity, even though itemizing could be more beneficial depending on individual circumstances.

Let’s begin by exploring the concept of the standard deduction, including who it benefits most and the specific standard deduction figures for the tax years 2023 and 2024. Additionally, we’ll delve into the extra standard deduction figures available for individuals aged 65 and above, along with guidance on computing it for dependents.

Standard Deduction 2023

What is the Standard Deduction?

When it comes to tax deductions, the standard deduction is a fixed amount recognized by the IRS. This deduction is subtracted from your adjusted gross income to reduce your taxable income. Your tax filing status typically determines the level of standard deduction you qualify for.

Among specific individuals, including those who have visual impairments or have reached the age of 65, there is typically a provision for an increased standard deduction, often referred to as an extra standard deduction. Conversely, those who are eligible to be claimed as dependents may receive a reduced standard deduction.

In the realm of tax deductions, the standard deduction is a common benefit accessible to many taxpayers, even in the absence of other qualifying deductions or credits. While the IRS typically allows individuals to claim this deduction without much scrutiny, specific scenarios might render some taxpayers ineligible for this tax benefit.

Consider this scenario: When married couples file their 2023 tax return jointly and have an adjusted gross income (AGI) of $125,000, they qualify for a standard deduction of $27,700. This deduction effectively lowers their taxable income to $97,300 ($125,000 – $27,700).

How the Standard Deduction Works for 2023 Tax Return

When it comes to filing your taxes, you have the choice between claiming the standard tax deduction or itemizing your tax deductions for 2023. Opting for the standard deduction allows you to deduct a set amount without needing to provide evidence to the IRS. On the other hand, itemized deductions provide an alternative method for lowering your taxable income.

Individual expenses permitted by the IRS, known as itemized deductions, serve as a means to reduce your taxable income. Some examples of these expenses are property taxes, specific unreimbursed medical expenses, and business mileage.

Opting for the standard deduction prevents you from claiming deductions on home mortgage interest or accessing specific tax benefits. However, if you choose to itemize your deductions, it is essential to retain all relevant tax deduction documents in case the IRS audits you.

Standard Deduction 2023

In the tax world, the 2023 standard deduction holds different values for various filing statuses. For single tax filers and married individuals filing separately, the deduction stands at $13,850, while it increases to $27,700 for those filing jointly. Heads of household are eligible for a standard deduction of $20,800.

Tax Filing Status 2023 Standard Deduction

  • Single $13,850.
  • Married, filing separately $13,850.
  • Married, filing jointly; qualified widow/er $27,700.
  • Head of household $20,800.

Additional standard tax deduction who is 65 of age or older

Individuals aged 65 and above, as well as those classified as blind according to IRS criteria, are eligible for an extra standard deduction that can be applied on top of their current standard deduction allowance.

The amount of additional tax deduction you qualify for is determined by your filing status and the specific criteria that apply to your situation.

2023 Standard Tax Deduction for Dependents

When submitting your tax return and being claimed as a dependent by another individual, the standard deduction you’re eligible for is based on your earned income. In the upcoming tax year of 2023, the options available to you are a fixed $1,250 or the total of your earned income plus $400. It’s important to keep in mind that if you choose the latter option, the sum cannot surpass the standard deduction allotted for your specific tax filing status.

Clean Vehicle EV Tax Credit for 2023 Tax Return

Posted by admin on March 7, 2024
Last modified: March 8, 2024

Start saving money on gas today with the Clean Vehicle Credit offered through the Inflation Reduction Act. This EV tax credit provides a dollar-for-dollar reduction of the taxes you owe, giving you the opportunity to save up to $7,500 as tax credit when buying a new electric vehicle or up to the lesser of $4,000 or 30% of the purchase price for a used electric vehicle.

Exploring eco-friendly transportation goes beyond mere savings; it signifies a commitment to cleaner journeys and a step forward towards a more sustainable driving experience. To assess your eligibility for this credit, we have compiled essential information such as its definition, functioning, and existing criteria.

What is the Clean Vehicle EV Tax Credit?

The Electric Vehicle EV Tax Credit, designed to reduce taxes for individuals buying electric vehicles, initially provided up to $7,500 for new EV purchases as outlined in Section 30D of the Internal Revenue Code. With the passing of the Inflation Reduction Act in 2022, significant modifications were made to the regulations governing electric vehicles bought between 2023 and 2032, establishing the new Clean Vehicle Credit program.

In accordance with the Inflation Reduction Act, similar to past regulations, individuals who acquire a brand-new plug-in electric vehicle or a fuel cell car starting from 2023 can potentially be eligible for a tax credit aimed at promoting clean transportation, which could amount to a maximum of $7,500. Noteworthy changes include the introduction of income thresholds, manufacturer sales price conditions, and final assembly prerequisites, which needed to be included in earlier guidelines.

Commencing from the upcoming year of 2023, there is an opportunity to avail of an EV tax credit when acquiring a second hand electric vehicle. This credit is calculated as less than $4,000 or 30% of the vehicle’s purchase price. Additionally, specific criteria such as income, manufacturer sales price, and final assembly apply to used electric vehicles.

EV Tax Credit

Is There a Difference Between State Electric Benefits and Federal EV Tax Credits?

Indeed, the Federal EV Tax Credit, overseen by the IRS, serves as a pivotal component in diminishing the expenses for taxpayers investing in electric vehicles. Enacted through the Inflation Reduction Act, this credit is designed to alleviate your tax burden by decreasing the amount owed in taxes.

It is important to note that in addition to the widely recognized federal tax credit for electric vehicles, there are also state-specific incentives available for buyers. One such example is the Clean Vehicle Rebate Project (CVRP) in California, which offers rebates to encourage the purchase of electric vehicles.

You will receive state rebates by mail when you buy an electric vehicle and fulfill certain state-specific criteria. These rebates are separate from any tax returns you may file.

How Does the Clean Vehicle EV Tax Credit Operate?

The Inflation Reduction Act of 2022 marked a notable change in approach, particularly regarding vehicle acquisition, from 2023 to 2032. As stipulated by the IRS, individuals and businesses alike can benefit from the federal EV tax credit.

Within the system are specific income limits that must be adhered to, ensuring that there is a structured approach rather than a chaotic free-for-all.

It is crucial to emphasize that this credit cannot be refunded, thus preventing individuals from receiving more money than their tax liabilities. Nonetheless, it does provide the benefit of a one-to-one reduction in tax obligations.

EV eligible for the Clean Vehicle Tax Credit?

Are you curious about whether your car is eligible for the EV tax credit? Determining eligibility is a challenging process, but fear not – let’s dive into the details for you.

Meeting certain criteria is necessary for a vehicle to qualify for the EV tax credit, including having a battery capacity of seven kilowatt-hours or more and satisfying specific mineral and battery component standards, among other considerations.

Criteria for qualification will now vary based on your financial standing, the retail price set by the manufacturer, and the location of the electric vehicle’s final assembly within the United States. Additionally, eligibility encompasses pre-owned electric vehicles, enabling you to receive credit for them as well.

Getting the Clean Vehicle EV Tax Credit in 2024?

Taking advantage of the federal EV tax credit is essential to maximizing the benefits available to you. Many people tend to miss out on potential tax credits, making claiming them an important step in optimizing your benefits. Ensure you are well-prepared when filing your taxes by having all the necessary information and forms ready. This includes specifics regarding your vehicle’s battery capacity, weight, where it was finally assembled, and the VIN.

Make sure to have those details handy when you decide to apply for the credit and submit Form 8936, the Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles), along with your tax return.

Rest assured that you won’t need to stress about determining which forms to submit for the Clean Vehicle Tax Credit. The tax professional, a dedicated team member at PriorTax will guide you through a series of straightforward questions regarding your EV acquisition. By cross-referencing your income details from documents such as W-2s and 1099s, they will accurately calculate the electric vehicle credit applicable to you.

Explore the option of seeking guidance at PriorTax while having your tax return examined by a PriorTax Tax Professional before submission. Alternatively, entrust your taxes to a PriorTax dedicated tax professional for seamless preparation. A fresh addition this season allows for face-to-face consultations with a nearby professional for efficient tax filing.

Standard vs Itemized Tax Deduction

Posted by admin on February 29, 2024
Last modified: March 4, 2024

If you have ever carefully listed out your itemized tax deductions before, especially if you own a home, consider a different approach now. With the updated standard tax deduction amount for your specific filing status, you might find it more advantageous to take the standard deduction instead of itemizing your tax deductions.

The latest data from the IRS reveals that approximately 90% of individuals filing taxes are now opting for the standard deduction, a shift largely attributed to changes implemented through the Tax Reform legislation in 2017. If you find yourself uncertain about the most advantageous choice for this tax year, consider utilizing our convenient tax deduction calculator or reaching out to our specialized tax experts for personalized guidance throughout the entire process.

In just a short amount of time, grasp the modifications in the standard deduction and itemized deductions, and receive an approximate calculation of your deductions depending on the information provided. Additionally, this tool advises you on whether to opt for standard or itemized deductions and offers suggestions on year-end tax strategies to enhance your itemized deductions.

In general, when your standard deduction outweighs your itemized deductions, opting for the standard deduction is usually the more advantageous choice.

Should I take the standard vs. itemized tax deduction

Contemplating whether to opt for the standard deduction or dive into the itemized deduction realm? The decision of which one will yield a greater tax benefit for you is contingent upon your specific situation. Let’s delve into different scenarios where either the standard or itemized deduction would be most advantageous.

Itemized Tax Deduction

When you should take the standard deduction

Understanding the complexities of tax preparation may appear overwhelming at first, yet rest assured, assistance is within reach. The choice between opting for the standard deduction or itemizing largely hinges on your eligibility for various deductions. The standard deduction represents a fixed sum determined by your tax filing status, offering supplementary advantages for individuals aged 65 and above or with visual impairments.

The current standard tax deduction is:

  • $13,850 for single filers
  • $13,850 for married, filing separately
  • $20,800 for heads of households
  • $27,700 for married, filing jointly

Each year, the IRS updates the standard deduction figures to account for inflation. As a result, it is important for you to review your expenditures annually in order to determine the best strategy for your situation if you have itemized deductions such as mortgage interest and property taxes.

In the upcoming tax year of 2023, significant inflation adjustments have been implemented, marking one of the largest increases in decades at 7.1%. This adjustment may lead to the standard deduction surpassing your itemized deductions for the year, making it more advantageous to opt for the standard deduction.

In plain terms, choosing the standard deduction is the best decision when the total of eligible itemized expenses falls short of the standard deduction threshold. When contemplating whether to go with the standard deduction, it is crucial to evaluate itemized deductions like mortgage interest, medical costs, and charitable contributions to inform your tax-filing decision-making process.

When you should take the itemized deduction

Wondering about the right time to consider itemizing deductions? It becomes beneficial when your qualifying expenditures, such as medical expenses, mortgage interest, or donations to charity, exceed the standard deduction threshold. By itemizing deductions, you could potentially reduce your tax liability if these eligible expenses surpass the standard deduction amount.

In certain scenarios, it is possible for taxpayers to find themselves in a situation where their itemized deductions match the standard deduction amounts set at $13,850 for single filers and $27,700 for married couples filing jointly. To overcome this, individuals could consider strategies such as increasing their charitable donations towards the end of the tax year or ensuring they include all eligible charitable contributions when filing their taxes, thereby elevating their total itemized deductions above the standard deduction threshold.

Exploring potential qualifying expenses can be made easier by consulting our article on often-overlooked deductions. Utilize our calculator that compares standard and itemized deductions for a clearer picture. Additionally, our team of dedicated tax professionals at PriorTax will tailor their guidance to your specific circumstances without requiring you to distinguish between standard and itemized deductions.

Itemized vs. Standard Tax Deduction calculator

Posted by admin on February 29, 2024
Last modified: March 4, 2024

Explore our tool that contrasts the Standard Tax Deduction and Itemized Tax Deductions. In just a short amount of time, you can grasp the differences between these tax deduction types and receive an estimated calculation of your tax deductions by providing key information.

Should you be wondering about whether to opt for the standard or itemized tax deduction, this tool can guide you and even suggest strategic end-of-year tax strategies to boost your itemized tax deductions. Feel free to reach out to our dedicated Tax Professional for a personalized assessment of how you can maximize your tax refund.

Standard Tax Deduction

Pros and Cons of Choosing Itemized Tax Deductions?

Exploring tax deductions on your tax return has the potential to make a significant impact on individuals by lowering their tax liability. However, grasping the concept of itemized tax deductions is essential to determine if you qualify for the standard deduction or itemized tax deductions. It’s crucial to accurately discern which tax deduction method is most beneficial for you.

Consider this scenario: with minimal itemized deductions such as personal property taxes on your vehicle and without significant expenses like home mortgage interest, it becomes evident that opting for the standard deduction is the probable choice.

Pros of Choosing the Itemized Tax Deduction

Choosing to itemize tax deductions rather than opting for the standard tax deduction can prove advantageous from a tax perspective. By itemizing, you have the opportunity to include detailed expenses such as mortgage interest, medical bills, or substantial charitable contributions, among others. This approach has the potential to lower your taxable income even more if your itemized expenses exceed the standard deduction for the applicable tax year.

Additionally, should you find yourself nearing the standard tax deduction threshold, you have the opportunity to enhance your tax deductions by ensuring you collect receipts for extra itemized deductions that could potentially push you beyond the standard deduction limit.

Explore the benefits of leveraging our advanced tax deduction calculator to gain clarity on the potential tax deductions tailored to your specific situation. This tool empowers you to make an informed decision on whether the standard tax deduction suffices or if itemizing your tax deductions would be more advantageous for you.

By utilizing the calculator before the year-end, you can strategically plan out tax-saving maneuvers to maximize your itemized tax deductions before the year concludes.

Cons of Choosing the Itemized Tax Deduction

In terms of potential downsides, there are no significant issues to be concerned with. Individuals who opt for itemized tax deductions simply need to ensure they have all the necessary paperwork ready come tax season to avoid any oversights. For example, those who own a home should have their Form 1098 detailing mortgage interest payments, records of property tax payments, documentation of state income or sales taxes paid, as well as receipts for any charitable contributions made.

Rest assured that you don’t need to stress about understanding the nuances of itemized tax deductions. PriorTax is designed to guide you through the process by asking straightforward questions about your tax deductions, regardless of your knowledge of their classification. For further clarity on which expenses qualify as itemized tax deductions, utilize our standard versus itemized tax deduction calculator to gain insight.

You may need to collect additional paperwork when it comes to itemizing. Some may be attracted to a more straightforward method involving standard tax deductions. However, if your itemized tax deductions exceed the standard amount, putting in a bit more effort to gather the necessary documents can lead to cost savings. Utilize our comprehensive tax document checklist to streamline the process of compiling your documents for itemizing tax deductions.

What are the Pros and Cons of Taking the Standard Tax Deduction?

Pros of Choosing the Standard Tax Deduction

In considering your tax planning, it’s crucial to grasp the impact of each tax deduction on your overall tax picture. Many individuals choose the standard tax deduction when filing their taxes for several reasons.

To begin with, the efficiency of the process is notable. Furthermore, the annual adjustment of the standard tax deduction results from inflation and the decisions made by Congress. This adjustment helps lower taxpayers’ taxable income.

Different filing statuses, such as single, married, filing tax jointly, or head of household, determine the standard deduction amount, which is increased for individuals aged 65 or older and those who are visually impaired.

Please be aware that if married couples decide to file separately, they won’t be able to claim the standard deduction if one spouse chooses to itemized deductions. It is necessary for both spouses to agree on either itemizing tax deductions or taking the standard tax deduction.

Cons in Choosing the Standard Deduction

Opting for the standard tax deduction simply for convenience might lead to overlooking opportunities to deduct expenses and potentially lower taxable income. The decision between standard and itemized tax deductions ultimately comes down to crunching the numbers.

When faced with the decision between standard and itemized tax deductions, it ultimately comes down to the numbers at hand. Opt for itemized deductions if they exceed the standard tax deduction amount, and choose the standard deduction if it provides greater benefits. In cases where your standard deduction aligns closely with your itemized deductions, ensure to review and consider any additional itemized deductions that could potentially tip the scale in favor of itemizing.

Rest assured that deciphering between standard and itemized tax deductions is not a concern you need to dwell on. Rest easy knowing that PriorTax can maximize your tax benefits, regardless of your financial decisions made the previous year. Whether you prefer to handle your taxes independently or seek the expertise of a PriorTax Tax Professional, rest assured that we are committed to securing every dollar you are entitled to and aiming for your most substantial tax refund possible.

Tax Deadline for Businesses You Need To Know

Posted by admin on February 22, 2024
Last modified: February 22, 2024

Tax Deadlines for Businesses such as C Corps, S Corps, and Partnerships, including LLCs.

When it comes to tax filing deadlines for business partnerships (such as multi-member LLCs) and S-Corps, the usual timeframe is by March 15 unless they follow a fiscal year. You can extend this deadline by six months to September 15 (or five months after the initial due date) by submitting Form 7004.

As of the fifteenth day of March 2024, it is the deadline for certain types of businesses to submit their taxes. Entities such as partnerships, multi-member LLCs, and S-Corporations must ensure they file either Form 1065 or 1120S by this date if they operate on a calendar year basis.

When operating a business that follows a fiscal year, it is essential to submit your tax return by the 15th day of the third month after the conclusion of your tax year. For instance, if your business adheres to a tax year from April 1 to March 31, the tax filing deadline for your business tax return would be June 15 instead of March 15.

What Should I Do if I Miss the Tax Filing Deadline for Businesses?

In the event that a tax deadline is overlooked, there are various options available to rectify the situation. The appropriate course of action is contingent upon the specific missed deadline and your financial circumstances, such as owing taxes or expecting a refund.

What Will Happen If I Miss the Tax Filing Deadline and Owe Taxes?

If you miss the tax filing deadline and have tax obligations, it is important to file your tax return promptly. Delaying the filing will result in accumulating interest, penalties for failure to file, and penalties for failure to pay until you settle the balance due by filing the return.

Did you Miss The Estimated Tax Payment Deadline?

If you fail to meet a tax deadline for making an estimated tax payment, it is important to rectify the situation promptly. The consequences, in terms of penalties and interest imposed by the IRS, are contingent upon the amount owed and the duration of the delay. Nonetheless, mitigating the repercussions can be achieved by remitting your payment as soon as possible.

The Best Way to File My Tax Return for Businesses

For those in search of the quickest method to submit their tax return, the most efficient and precise way is through electronic filing. Opting for E-Filing with PriorTax ensures speed and enhances security compared to traditional paper filing methods.

With the convenience of electronically filing your tax return, there’s no need to fret about the document going missing in the postal system or reaching the IRS after the deadline. Instant confirmation of the IRS receiving and initiating the processing of your return gives you peace of mind.

How Much Time Do I Have To File My Back Taxes from the Missing Tax Filing Deadline and Owen a Tax Refund?

In the event that you fail to meet the tax filing deadline and have a refund due to you, there are important considerations. If you have overpaid for the tax year 2023, there are usually no repercussions for submitting your tax return late. Nevertheless, it is advisable to submit your return at the earliest opportunity.

Typically, there is a three-year window from the tax return deadline for claiming a tax refund. This rule applies to the 2023 tax returns, with the deadline set in 2026. If left unclaimed beyond this period, the tax refunds usually revert to the ownership of the U.S. Treasury.

What if I Made Mistakes and Need to Fix My Taxes?

In the event that an error is discovered and a tax re-filing or fixing your taxes becomes necessary, it’s important not to panic. Mistakes are a common occurrence in the process of tax filing. Should you realize that certain income was omitted or a specific tax credit was not claimed after submitting your tax return, there is no need to redo the entire process. Instead, you can file an amendment using Form 1040-X, ensuring that you provide copies of any forms or schedules that require modification or were initially left out of your original submission.

When it comes to rectifying errors on your tax return, IRS Form 1040-X plays a crucial role. Assisting you in navigating the amendment process, the experts at PreTax can guide you through the necessary steps to ensure your tax return is accurate.

To prevent any setbacks, it is essential to submit Form 1040-X only after your initial Form 1040 has been approved. If you seek to claim a tax credit or refund from a past year, it is imperative to file within three years of submitting your original return or within two years of paying the tax, depending on the later date.

Updates on Student Debt Forgiveness: February 2024

Posted by admin on February 22, 2024
Last modified: February 22, 2024

The Biden Administration is Forgiving $1.2 billion in Student Debt Forgiveness for 153,000 Borrowers. 

On the 19th of January 2024, a significant announcement was made regarding an extra $4.9 billion allocated for student debt forgiveness and relief. This relief is specifically for 73,600 individuals, including teachers, social workers, firefighters, and nurses, who are eligible for the Public Service Loan Forgiveness program.

In a recent announcement, the administration led by President Biden revealed plans to forgive $1.2 billion in student debt for 153,000 borrowers. Individuals whose loans are set to be forgiven can expect to receive a personal email notification from the President himself within the day, as per the Department of Education.

In response to the Supreme Court’s ruling against the Biden administration’s proposal for widespread student loan forgiveness, the White House has introduced a new initiative to tackle the nation’s massive $1.77 trillion student debt burden. This debt relief program aims to support millions of borrowers by allowing them to eliminate up to $20,000 each in student debt.

In its most recent announcement, the Biden administration confirmed that they have given the green light for loan forgiveness to almost 3.9 million borrowers. Among them are individuals who have been diligently paying off their debts over the span of many years. Specifically, the latest batch of debt relief, which benefits 153,000 borrowers, is allocated to those participating in the Saving on a Valuable Education (SAVE) repayment program and have completed a minimum of a decade’s worth of payments.

student debt forgiveness

Who Qualifies for February 2024 Student Debt Forgiveness?

According to a recent Biden administration announcement, 153,000 borrowers under the SAVE program have been deemed eligible for certain benefits. As confirmed by the Education Department, these individuals have fulfilled the criteria of being part of repayment schemes for a minimum of a decade and having initially borrowed $12,000 or fewer for their college education.

Upon surpassing the borrowing threshold of $12,000, the department clarified that each subsequent $1,000 loaned entitles the borrower to forgiveness after another year of timely payments.

What Do You Need To Do?

As per the Education Department, individuals who qualify for loan forgiveness will soon receive an email notification from the President. No additional steps are required from recipients, as loan servicers will handle the forgiveness process promptly. Following the official statement, borrowers can expect to witness their loans being forgiven directly in their accounts within the next few days.

What Is The SAVE Student Debt Forgiveness Plan?

Introducing a new initiative called the EASE program, a modern income-driven repayment solution launched under the guidance of the current administration. EASE aims to alleviate financial strain by adjusting a borrower’s monthly payments based on their income, offering relief from excessive debt accumulation. This innovative program addresses issues that existed in previous IDR programs, preventing interest from escalating on borrowers’ debts.

Participants in the SAVE program can qualify for loan forgiveness after either 20 years or 25 years of making repayments. However, the White House has introduced a more expedited 10-year forgiveness plan specifically for individuals with lower loan balances.

How Many People Are Enrolled in SAVE Student Debt Forgiveness Plan?

As of Wednesday, the Education Department reported that 7.5 million individuals are registered in SAVE, with approximately 4.3 million not making monthly payments.

Can You File a Tax Refund on a Weekend?

Posted by admin on February 15, 2024
Last modified: February 16, 2024

Is Weekend Tax Filing Possible? YES.

On weekends, taxpayers can anticipate the processing of their tax refunds by PriorTax and our dedicated tax professional, although they should still expect the weekend tax refunds to be processed within the typical operational timeline.

The policies of the company or institution issuing the refund will determine the extent to which refunds differ. A noteworthy observation is that numerous refunds, particularly those processed through automated electronic means, can be accommodated even during weekends.

In regards to the processing times of tax refunds, certain refunds might be affected by the operational schedule of banks and financial institutions, as they may not handle transactions during weekends. To ensure accurate details regarding refund processing times, it is advisable to reach out directly to the company or institution from which you are anticipating a tax refund from weekend tax filing.

Since the question needs more specific details, let’s assume the scenario involves receiving a refund on a bank card or credit card after returning an item on a Saturday morning. Upon returning the item and having it scanned by the store, the refund process is initiated promptly.

weekend tax

At the onset, a contractual agreement is established to ensure the provision of a refund. 

Suppose an item necessitates shipment back, analogous to the tax return process implemented. In that case, the timing of the tax refund processing varies depending on the status of one’s account and the nature of the item itself. It may be imperative to wait until the designated party physically receives the item before the tax refund can be effectively initiated. Remarkably, the registration of refunds transpires promptly once the item is scanned; nevertheless, in certain instances, the dispersion of refunds might be deferred until the conclusion of the business day, coinciding with the closure of operations.

It is doubtful that you will receive it on the weekend. The processing time for both banks and credit card companies may take several days. This is due to the multi-step verification process required to ensure the transaction is not fraudulent. The electronic payment first needs to be verified and approved by the store. It needs to be reviewed and approved by the corporate office if applicable, and finally, it has to be authorized by the financial institution before the funds are disbursed.

After transmitting the funds, they forward them to the appropriate institution responsible for verifying the presence of the funds in the originating account. To ensure the validity of the funds, all the transactions made throughout the day undergo processing before your institution finally deposits the funds into your account. Due to this meticulous process, it occasionally takes a span of two or three days.

In regards to the weekend tax filing, it is ultimately up to your particular establishment. Although certain banks, credit unions, and credit card customer service may have limited weekend hours, their operations are not at full capacity with all departments functioning. As a result, services related to transaction confirmations and funds availability are typically unavailable.

If the information gets processed partially before the weekend, there is a chance you will come across a pending status. However, if the information is not processed even in part, no notification will be displayed. Although some institutions can operate at full capacity throughout the entire week, the majority of them do not. Consequently, the funds will remain on hold until Monday for further processing unless they fall on a holiday.

Accurate Tax Filing for Maximum Tax Refund

Posted by admin on February 15, 2024
Last modified: February 16, 2024

Accurate Tax Filing for Maximum Tax Refund for Past Tax affecting the Current Tax Year

Taking a second look at your previous tax returns may lead to a pleasant surprise of a larger tax refund. Whether you filed your taxes independently or with a dedicated Tax Professional for the past three years, PriorTax is here to meticulously assess those past returns and guarantee that no potential tax deductions or tax credits are overlooked for accurate tax filing

How to Find Money Others Miss.

In past tax years, it’s possible that you may have missed out on claiming all the tax credits or tax deductions that you were eligible for, which includes

accurate tax

Missed: Education Tax Credits

As a student or a parent of a student, our primary goal is to ensure that you are making the most out of the benefits provided by the American Opportunity Tax Credit, the Lifetime Learning Tax Credit, and any available tuition tax deductions.

By providing education tax credits, the burden of higher education costs is eased as eligible students and their households see a reduction in their tax obligations. In certain situations, taxpayers may even be eligible for a tax refund.

American Opportunity Tax Credit

With the enactment of the Protecting Americans from Tax Hikes (PATH) Act of 2015, the American Opportunity Tax Credit (AOTC) was solidified as a lasting provision. This tax credit builds upon the foundation set by the Hope Credit, aiming to alleviate the financial burden of education and make college accessible to individuals from lower-income backgrounds.

Lifetime Learning Tax Credit

The Lifetime Learning Credit (LLC) offers a valuable opportunity to non-degree-seeking students throughout their post-secondary education. This credit allows workers to enhance their job skills, ultimately leading to higher earning potential. Unlike the AOTC, the LLC focuses explicitly on reducing income tax for eligible individuals, making it an ideal option for those with tax obligations.

The list of acceptable expenses that qualify for either the Lifetime Learning Tax Credit or the American Opportunity Tax Credit is extensive.

– Tuition After deducting tax-free contributions like scholarships, fellowships, Pell grants, veterans assistance, and employer assistance, the remaining amount of tuition is determined.

– Student fees and expenses required for enrollment

– Books, course-related materials and supplies if it is required to enroll or attend the shcool

– Education such as games, sports, and hobbies or non-credit programs and courses that directly help to improve skills for jobs.

Missed: Inaccurate Tax Filing Status

When it comes to maximizing your tax benefits, choosing the right filing status is crucial. By selecting the optimal filing status, individuals and families can take advantage of various tax credits and deductions.

According to the IRS (Internal Revenue Service), it is crucial to note that accuracy is not always guaranteed. Ensuring that your tax return is correct is essential, as any discrepancies could result in additional taxes, interest payments, or even penalties.

In the event that you have provided inaccurate information on your original return, it is advisable to make amendments. This includes any errors made regarding filing status, dependents, total income, deductions or credits. However, it is important to note that amendments are not necessary for math errors, as the IRS will rectify those themselves.

When it comes to accurate tax filing, the IRS highly recommends that married couples take advantage of the benefits of filing joint tax returns. By choosing to file together, couples can benefit from various tax breaks offered by the IRS. However, there are rare occasions when it may be more advantageous for married couples to opt for separate tax returns.

Missed: Overlooked Earned Income Tax Credit

Working families can receive thousands of additional dollars through the Earned Income Tax Credit (EITC). Factors including income, marital status, and the size of the family determine eligibility for this credit.

Get in touch with a PriorTax dedicated Tax Professional to find all issues for accurate tax filing this year and make tax amendments from past tax years for maximum tax returns.

Get Caught Up on Filing Back Taxes or Past Taxes.

Posted by admin on February 8, 2024
Last modified: February 17, 2024

When it comes to getting up to date on your taxes, is it advisable to file back taxes? It is possible that it is still within your reach to file a tax return for a previous year in order to settle your outstanding balance or retrieve any refunds owed to you. Discover more about why one might consider filing back taxes and the steps involved in initiating this procedure.

Should you File Past Taxes or File Back Taxes?

By submitting past-due tax returns, you have the potential to achieve various benefits. These advantages include the ability to request a refund, avoid penalties and interest associated with late filing and payment, obtain tax return documentation for loan applications, and fulfill the necessary requirements to pay Social Security taxes and qualify for benefits.

Get in touch with a free Dedicated Tax Professional to walk you through filing back taxes from start to finish to avoid any additional penalties.

1. Claim a Refund

Filing a previous tax return can serve the practical purpose of uncovering potential tax refunds owed by the IRS. People often have their federal income taxes deducted from their paychecks, but an excessive amount is withheld occasionally. By submitting a tax return, you may be eligible for a refund that boosts your bank balance.

2. Stop Payment Penalties and Interest from Past Tax Filing

To prevent or reduce penalties, submitting your tax return before the deadline is crucial, regardless of your ability to pay the amount owed. Please file to avoid an additional 5% charge for each month your return is overdue for up to a maximum of five months. Please note that there may be minimum penalty thresholds in place.

In the unfortunate event that you cannot pay your taxes owed on time, the IRS imposes an additional penalty. Should you dutifully file your taxes by the deadline yet find yourself unable to pay the total amount owed, a charge of 0.5% will be applied to the unpaid tax for each month (or part thereof)

Until your outstanding balance is completely settled or the penalty reaches a maximum of 25% of your taxes, the accumulation of these fees will persist. Additionally, the IRS imposes interest on unpaid taxes. Unlike penalties, interest continues to accrue even when the failure to tax file and failure to pay penalties from it.

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3. Prepare Tax Returns When Applynig for a Loan

When seeking certain types of loans, like mortgages or business loans, it is essential to provide documentation of your income during the approval process. To streamline the process, ensure your tax returns are filed before making a loan application.

4. Pay Social Security Taxes for Tax Benefit Qualification

Entrepreneurs who work for themselves are required to fulfill their Social Security and Medicare obligations by submitting their individual tax returns. Through this process, you not only declare your earnings but also become eligible for future Social Security retirement, disability benefits, and Medicare assistance.

How Late Is Too Late?

The IRS highly recommends that individuals file any past-due tax returns for any years that still need to be filed. Generally, the IRS expects taxpayers to file their last six years of tax returns in order to maintain a good standing.

Regrettably, there exists a restriction on the length of time in which one can file a tax return to seek tax refunds and credits. The Internal Revenue Service (IRS) enforces a policy that solely permits the claiming of refunds and credits within a three-year timeframe, counting from the initial due date of the tax return.

You must submit your tax return within three years of the deadline to avoid forfeiting a potential tax refund. This means you will no longer be eligible to claim advantageous tax credits or any extra funds withheld from your salary.


Filing back taxes for previous years is a possibility that should not be overlooked. However, it is important to note that the IRS typically deems individuals compliant if they have filed their tax returns for the last six years.

In accordance with the stipulations set forth by the IRS, individuals are permitted to claim refunds and tax credits solely within a three-year timeframe from the original due date of their tax return.

How To Get Caught Up on Late Taxes

Posted by admin on February 8, 2024
Last modified: February 12, 2024

Filing late tax returns for past years may seem daunting and impossible, but following a few simple steps can be accomplished with relative ease.

1. Your Income and Expense information

Commence the information-gathering process by assembling all pertinent data from the specific tax year you intend to file a tax return. Consolidate your W-2s, 1099s, and any documentation pertaining to potential tax deductions or tax credits that you may be eligible for. Verify the validity of the tax forms obtained to ensure that you select the appropriate ones for the tax return you are preparing to submit.

2. Request Any Missing Late Tax Documents From the IRS

When it comes to obtaining tax documents from the IRS, some people may need help locating records from previous years. However, a convenient solution is offered by the IRS: a form that allows you to request your tax information for a specific year.

If you are looking for a way to access your tax return information, regardless of whether you have filed your taxes or not, Form 4506-T is the perfect solution for you.

Regarding tax filing, it is important to note that the IRS will provide the information it has on file, which includes details found on various forms like W-2s, 1099s, and 1098s. However, it should be noted that the IRS may need to possess information about potential deductions and credits that you may be eligible for.

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3. Complete and E-file your Late Tax Return

Ensure that you efficiently submit your tax return by completing and filing the necessary paperwork. It is crucial to use the tax forms that correspond to the year in which you are submitting your taxes; for example, if you are filing for the year 2020, make sure to use the appropriate 2020 tax return forms. If you are filing late taxes within the past 3 years, you will likely E-file your back taxes with PriorTax. Our dedicated Tax Professional will file your back taxes with you from start to finish. Also the IRS website offers these essential documents for easy access. Taking your time and exercising patience are vital aspects of completing a tax return manually.

When it comes to completing a tax return manually, having patience is crucial. Fortunately, individuals can also use PriorTax and their Dedicated Tax Professionals team to file tax returns from previous years for free.

To begin the process, simply choose the specific year for which you wish to file your tax return. Afterward, provide your tax details, and PriorTax will effectively complete the necessary forms on your behalf. Please note that for tax returns from previous years, you will need to print and mail them, but this can be much easier by E-Filing with PriorTax.

When you choose PriorTax’s free Dedicated Tax Professionals, a skilled local expert will be assigned to handle your taxes from start to finish, tailored specifically to your individual circumstances. Alternatively, you can opt for unlimited assistance and guidance from our team of tax experts as you navigate the process of doing your taxes with PriorTax, ensuring a comprehensive and seamless experience from beginning to end.

With the assistance of PriorTax, rest assured that you can confidently file your own late taxes and complete them accurately through our step-by-step guidance. Whether you choose to E-file electronically or by mail, we are committed to ensuring 100% accuracy and securing your maximum refund.


In case you have outstanding late tax obligations from previous years but still need to submit your tax returns, there is a way to minimize penalties and interest.

When it comes to filing your overdue taxes and making the necessary payments, you can unlock a world of benefits for your future. By ensuring that you have a solid record of your late tax returns, you’ll not only be eligible for Social Security retirement and disability benefits but also open the doors to receiving essential Medicare benefits when you require them.