It’s that time of year again – tax season! We know that taxes can sometimes feel overwhelming, so we wanted to bring you some helpful updates and tips to make filing your 2023 taxes a breeze.
Dates to Remember
- April 15: Individual tax returns are due.
- April 15: Deadline to make IRA or HSA contributions for the 2023 tax year. Call or stop by your local Star Bank office if you need to make a contribution for 2023.
- October 16: Individual tax returns are due for those who received an extension.
Minnesota Tax Changes
Last legislative season, lawmakers approved a plan that gives relief to seniors and low-income families. Here are a few updates to know about before filing your taxes:
- Child Tax Credit
A new tax credit has been introduced aimed at reducing child poverty by one-third in Minnesota. Families earning less than $35,000 per year are eligible to receive the $1,750 credit per child. Learn more.
- Social Security Tax Cuts
Retired couples earning up to $100,000 and individuals earning up to $78,000 will not owe taxes on their social security benefits from tax year 2023 onwards. Learn more.
- Surplus Rebate Checks
Those who received a budget surplus rebate check will not owe the state taxes on those payments. However, they will owe federal taxes and can expect to pay between $26 to $286 depending on the size of their rebate.
Getting Started Filing
Here are some tips and resources to help make filing fairly straightforward:
- Gather Your Documents & Info
This includes (but isn’t limited to) your
- Social Security Number or Individual Tax Identification Number (ITIN).
- Your Adjusted Gross Income (AGI): This is your total income minus certain adjustments.
- W-2s from your employer(s).
- 1099s or tax forms that report other income.
- Receipts for tax deductions.
- Credits and Deductions
You may be eligible for different credits and deductions which could help you save money or get a larger return. Here are a few to consider:
Saver’s Credit: If you contribute to a retirement plan and are not a full-time student or claimed as a dependent, you may be eligible for this tax credit. The amount of the credit depends on your filing status and adjusted gross income.
Student Loan Interest: Up to $2,500 of student loan interest payments can be deducted, depending on your modified adjusted gross income.
Charitable Deductions: Qualified charitable donations can be deducted if you itemize your taxes.
Other Deductions and Credits: For additional deductions and credits, check the IRS website.
- Filing Your Return
There are lots of options for preparing and filing your tax return. Learn about your options so you can make the right choice for you:
Free File: The IRS offers a free guided tax prep software for taxpayers whose adjusted gross income is $79,000 or less.
IRS Online Forms: If you don’t qualify for the Free File program, the IRS has electronic versions of the paper forms that do the math for you. This option does not offer much guidance so it’s best suited to those who have less complicated tax returns.
Tax Preparation Software: There are many online tools that will walk you through preparing your tax return and help you figure out which credits and deductions you’re eligible for. These tools often charge a fee for the preparation and filing for both federal and state returns.
Professional Tax Preparer: Tax preparation firms and accounts are available for hire for expert one-on-one help. Be sure to choose your tax preparer carefully as they will have access to a lot of your sensitive information. The IRS has compiled a list of verified tax preparers so that you can start the search for a preparer in your area.
- What is my routing number?
To have your refund directly deposited into your account you'll need to know your account and routing number. If you have a check you can find your routing number at the bottom of the check followed by your account number. If you don't have a check, your local Star Bank office can assist you with your account number.
The routing number for Star Bank is 091206541
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Congratulations – Your 2023 tax returns are filed! Now what? Here are some common questions and next steps.
- What if I can’t pay my owed taxes?
The IRS still recommends filing your tax return on time, even if you can’t pay in full what you owe. Contact the IRS and the Minnesota State Tax office. Partial payments will help reduce penalties and you may be eligible for a repayment plan.
Loan options to assist in paying off tax debt might also be a good option for you. Reach out to your local Star Banker to explore your options and come up with a good plan for you.
- Tracking my refund
The IRS cannot guarantee a timely issue of your refund check, but if you file electronically the refund typically takes 10-21 days. Use the IRS Refund Status Tool to track the status of your refund.
- What should I do with my refund?
While going on a tropical vacation or a big shopping spree might sounds like a good idea, here are some financially sound ideas to use your tax refund:
Build an emergency fund: Unexpected expenses can drastically cut into a budget, but let’s face it they’re bound to happen. Put your tax return away in savings account or money market so that you can easily access it if unanticipated costs pop up.
Pay off some debt: Your tax refund is a perfect opportunity to pay off or chip away at your debt. Paying off higher interest debt like credit cards can save you money in the long run.
Boost your retirement fund: It’s never too early to save for retirement. Pump up your employer-provided 401K or your Individual Retirement Account (IRA) by contributing part or all of your tax return.
Beware of Tax Scams
Scammers are using regular mail, the phone, email, and social media to trick individuals, businesses, payroll, and tax professionals. Be knowledgeable about the different tactics scammers are using so you aren't scammed out of your money and personal information.
The IRS will never contact you by email, text message, or social media to request personal or financial information. Visit the IRS's website to know how to verify if its actually the IRS contacting you and to stay informed about the latest scams going around.
To report tax-related scams, visit the IRS's website. Instances of IRS-related phishing attempts and fraud should also be reported to the Treasury Inspector General for Tax Administration at 800-366-4484.
The information in this article is intended solely for general information and educational purposes only. Any use of this information should be done only in consultation with a qualified and licensed professional.