The deadline to file your taxes this year is April 18, 2023. Geltrude & Company Founder Dan Geltrude says “it’s time to get moving.” Dan joined Yahoo Finance’s Live’s Brad Smith to discuss tax filing dilemmas, IRS changes and challenges, and the outlook for taxpayers, as part of the Yahoo Finance Ultimate Tax Guide series. If you still haven’t started your 2022 taxes, you’re not alone – in a Yahoo Finance twitter poll, more than 40% of users say they have yet to file.
“Good news, bad news, depending on how you look at it, there aren’t a lot of changes” with this year’s taxes, says Dan. But there are a few – keep an eye out for larger standard deductions and adjusted goal posts for tax brackets, which moved slightly compared to last year. Dan also noted both the earned income tax credit and the child tax credit for 2022 tax year will be smaller, and the expansion of child and dependent care credits expired.
Despite everyone getting a couple more days to file this year, you might need a little extra time. If you file an extension, you have until October 16, 2023 to get your return in. But remember: tax payments are due April 18, regardless of whether you’ve filed an extension or not. So if you think you’ll owe money, check ahead of time and get your payment in. Otherwise you’ll face penalties.
Key Video Moments:
00:01:08 Standard deductions larger, tax brackets have moved
00:01:33 Child tax credit, earned income tax credit are smaller
00:02:33 Key tax deadlines to keep in mind
00:04:20 Tax expectations for first-time homeowners
00:05:25 How remote work affects your state tax return
Video Transcript
[MUSIC PLAYING]
BRAD SMITH: Well, if you haven’t touched your taxes yet, then guess what? You are not alone this year. More than 40% of Twitter users say they have yet to file their taxes. So, Dan, I’m going to ask you, what do they need to know as they’re getting ready to submit?
DAN GELTRUDE: They need to start get moving here–
BRAD SMITH: Well, yes. Clock’s ticking.
DAN GELTRUDE: –I mean, especially if they’re thinking that they’re actually going to have a tax preparer available to do their tax filing because there’s a shortage of preparers. So if you’re waiting until the last minute, there’s actually a possibility you may not have somebody that can do this for you, meaning file an extension. We’re pretty much at the point now where can people really get those returns done in time? Probably not.
BRAD SMITH: OK, so walk us through the biggest changes between last year and this year.
DAN GELTRUDE: Sure. So I guess good news, bad news, depending on how you look at it. There aren’t a lot of changes going on right now with the tax code. Why? Because Congress has been split and they haven’t been able to decide on anything.
So one of the things is good news. The standard deductions are larger this year. The other thing is is that the tax brackets have moved, not the rates, but the brackets have moved up, which also means a little bit more tax– a little bit less taxes to be paid.
All right, so now there’s some other things that maybe aren’t such good news. So you have the Child Tax Credit, a little bit smaller this year, also the expansion of the Child And Dependent Care Credit expiring. So that’s not good news. The Earned Income Tax Credit also smaller.
There was also a deduction out there basically for everyone up to $300 for charitable deductions. That’s now disappeared. So if you want to get a deduction for any charitable contribution, you must be filing a schedule A, which means you’re taking itemized deductions, not the standard deduction.
BRAD SMITH: Sure. Now, everybody knows the common deadline, April 15. But beyond that, what other key deadlines do people need to keep in mind as they are filing?
DAN GELTRUDE: So we get a couple extra days this year the way the calendar works out. It’s April 18 for filing–
BRAD SMITH: OK, 18.
DAN GELTRUDE: –your tax return. Then we have the June 15 deadline, which relates to making your next estimated tax payment for those that are required to make estimated tax payments. And then you have the extended due date for your personal tax return, which is October 16 this year. So if you’re not going to make the deadline next week, file an extension. All your tax has to be paid first, though. It’s not an extension for taxes, only the return. And then you can file your return on October 16.
BRAD SMITH: We know that the IRS has been going through a massive effort as well just to bring more people on to make sure that these returns get processed through. I mean, what type of timelines are we looking at there as well? What can people expect realistically?
DAN GELTRUDE: Well, this is the government. So things take a while to get moving. I’m going to say something that is a little bit unpopular. And that is the IRS does need more resources. They don’t have enough people to be able to process all these returns.
I know people are afraid of, oh, they’re going to have more auditors. We’re all going to get audited. Well, maybe some people, but we have to focus in on they don’t have enough people to service the taxpayers, meaning answering questions and being able to process tax returns, like your refund. So they are getting better, but they do need to bring on more people. I anticipate that’s going to be about a two-year cycle for them to catch up.
BRAD SMITH: We had put the question to some of our Twitter followers out there and really just tried to engage them within this conversation, get a sense of what they want to know as well. One, what should I expect my taxes to look like as a new homeowner? That was one of the questions that came up from our followers.
DAN GELTRUDE: So what that question really relates to is am I going to have enough deductions now that I’m a homeowner, between your real estate taxes and your mortgage interest, where it will be higher than the standard deduction? Now, the standard deduction is pretty high right now. So if you’re going to exceed that because you’re a homeowner, well, OK, now you’re going to get some tax benefit. But if your itemized deductions, because you’re a homeowner, are less than the standard deduction, then you’re actually not going to get any additional tax benefits.
BRAD SMITH: And then, additionally here, another question that came in from our Twitter following– I love these questions. In fact, continue to throw them onto the thread that we’ve got running on our poll as well here. But they say, “If my office is in a state that I don’t live in and I work remote–” that topic of virtual employment reigns supreme right now, for sure– “does that change my filing status at the end of the day?” What do we know related to that?
DAN GELTRUDE: OK, so where you live and where you work, that’s not an IRS issue. That’s not a federal issue. That’s a state issue. And now what you have is all these states are fighting to get more taxes.
So there’s actually a lot of litigation going on between the states, where they’re all trying to say, hey, those are our tax dollars, in spite of where they live or where they work. So the answer to that is not black and white. It’s actually gray. It depends which state you’re living in and which state you’re working in when it comes to remote work.
BRAD SMITH: All right, Dan, you clearly had some good coffee here today, no doubt. Just lastly here, when we think about the number of homes that are trying to figure out, all right, what are the benefits that we can take advantage of? Where do we perhaps just need to pull in a professional to make sure that we get the best credits as well out there?
And then, additionally, those that are saying, all right, I have a portfolio as well that I have to account for. Perhaps that’s something that we need to hit on. We’ve got a heavy investment audience out there, too, that’s just wondering what some of the biggest changes in terms of some of their either capital gains or capital losses may have been in 2023, between 2022 and 2023?
DAN GELTRUDE: There’s been a lot of discussions about what changes may occur, right? But we’re not in that position now. However, what’s complicated a lot of things from a tax standpoint for investors is crypto. A lot of that reporting has become very complicated.
So you have to look at it this way. If you’re not a tax expert, why wouldn’t you invest those dollars to have someone do it for you? There’s plenty of things I’m not an expert in. So I have to pay someone else to do it for me.
Why would you want to mess around with your taxes? I really believe, unless you have a super simple return, it is probably a good investment to have someone who’s seasoned in preparing tax returns to do that for you.
BRAD SMITH: Yeah. I know if it’s anything more than changing a light bulb, I’m probably going to call an electrician. Same thing with taxes largely there. Dan Geltrude, thanks so much for taking the time here with us today.
DAN GELTRUDE: Thank you.
BRAD SMITH: I appreciate it.