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| Whether it's the surging cost of living this past year or people just trying to get a jump on their taxes, more people have already filed their taxes this year than in the same period a year ago, according to the IRS. If you're not one of them, why not? |
| According to the most recent data, the IRS said it received nearly 28.83 million individual income tax returns by Feb. 10, up 9.1% from 26.42 million by Feb. 11, 2022, even though average refunds are down so far by 13.2% to $2,084. |
| That's a healthy start but still a drop in the ocean, with the IRS expecting more than 168 million individual tax returns this year. Of course, there's still time to file your tax return because the deadline isn't until April 18 this year, but what's holding you up? Maybe it's that in a year of surging inflation, rising interest rates and market volatility, you took side gigs in and out of the home or decided to work remotely in a different state to be closer to family and you just don't know how to account for all of that. |
| If that's the case, we can help you sort out what you need to know about those side hustles, the home office deductions and income from another state. |
| Important information: Are you ready to file your taxes? Here's everything you need to know to file taxes in 2023. |
How do I file taxes for a side gig? |
| By late last year, almost 70% of Americans had a side gig or planned to pick one up to earn some extra income. Along with that extra money, though, it may feel like extra headache too now that tax time has rolled around. |
| You'll need to tally up your earnings and pay income tax on it, although the IRS delayed having to collect 1099s for every person who received at least $600 electronically through a payments platform like PayPal or Venmo. |
| On the flip side, you may be able to deduct business expenses, for example, if you exclusively worked from home for that side job or used your car. |
 | | New York City is offering a wide range of free tax prep services this year | | New York City Department of Consumer and Worker Protection | |
What happens if I work remotely in another state? |
| If you took advantage of remote work and relocated to a different state to be closer to family or friends or hang out on a beach, you might have some state tax consequences to watch out for. |
| The biggest concern is double taxation if the state your office was located is in any of these states: Connecticut, Delaware, Nebraska, New York or Pennsylvania. In those states, employers withhold income tax based on where the employer is located unless the company requires the worker to telecommute. |
| So, if employees choose to work from a different location out of convenience, not requirement, those states will tax the employee's income no matter if they're working and living in a different state and already paying income tax there. |
| Other states will make you file tax returns in the state you're working in and in the state where your office is located to get a credit for extra state taxes you might have paid. Other states allow your employer to change the withholding in your paycheck to match where you're working. |
| Bottom line is state taxes are complicated, and you must review your state tax laws. |
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