The Internal Revenue Service (IRS) will start accepting and processing federal income tax returns for 2023 starting Monday. Filing taxes is an essential task that taxpayers cannot overlook, as it can lead to hefty penalties. To make the process easier, more efficient, and cost-effective, here are some key things to keep in mind:

1. Know the Deadlines: For most taxpayers, the filing deadline is April 15. If you need more time, you can file for an automatic six-month extension, but remember that any remaining taxes owed for 2023 must be paid by April 15 to avoid late payment penalties and interest. Tax filers in Maine and Massachusetts have until April 17 to file and pay due to holidays in those states. Additionally, if you live in a federally declared disaster area, the IRS might have extended the deadline for you.

2. Refer to Last Year's Return: Pulling out your 2022 tax return can serve as a useful reference point for identifying the necessary documents for this year's filing. This is particularly important if you opted for digital records rather than paper documents. Make sure to review all sources online to gather any 2023 tax forms, especially if you collected unemployment or had taxable one-off payments.

3. Assess Life Changes in 2023: Major life events such as marriage, divorce, having a baby, becoming widowed, selling a home, relocating to another state, or other significant transitions can impact your tax liability or potential refund. If you notice a significant difference compared to last year, double-check your calculations to ensure accuracy.

4. Check for 1099-K from Payment Apps: If you have a small business or side gig and received payments through third-party platforms like Venmo, check your account for a 1099-K form. While the IRS delayed the requirement for these forms for transactions exceeding $600, some states already enforce it. Ensure that the reported transactions reflect true business-related income and exclude any personal transactions by providing a note to the IRS.

5. Fill out Form 8962 for Health Insurance: If you received advanced premium tax credits for health insurance purchased through a public exchange, you must complete Form 8962. The information needed for this form will come from Form 1095-A, which should have been issued to you. Even if you didn't receive the credits but believe you qualify, the same form is required.

6. Stay Updated on Tax Breaks: Keep an eye on Congress for potential increases in two tax breaks. Lawmakers are discussing a bipartisan tax package that could temporarily expand the Child Tax Credit for lower-income families and increase the deduction for small business owners purchasing equipment.

7. Expedite Your Refund: If you expect a refund, the IRS typically issues them within 21 days of accepting your return. However, if you qualify for the Earned Income Tax Credit (EITC), the IRS cannot issue the related refund before mid-February. To speed up the process, double-check your return for accuracy, file electronically, and choose direct deposit as the payment method.

8. Free Filing Options: Depending on your income level and the complexity of your return, you may be eligible to prepare and file your federal tax return for free using authorized tax software providers. This year, the IRS has introduced a pilot program called Direct File, which allows eligible individuals to file directly with the IRS without using intermediaries. The program is limited to 12 states initially, and availability may expand to private sector workers in the future.

Remember to file your state returns separately and check if your state offers a free filing program.

As the IRS begins accepting 2023 tax returns, being aware of these guidelines can help streamline the process and ensure compliance with tax regulations.