J.K. Lasser's 1001 Deductions and Tax Breaks 2023, 3rd Edition

Introduction

The word “taxes” makes most people groan. There are good reasons for this response: First of all, the cost of paying your taxes annually can be a financial burden. You may feel taken to the cleaners every time you view your paycheck after withholding for federal income taxes (not to mention state income taxes as well as Social Security and Medicare taxes). And taxes are time consuming—to gather information, meet with a tax professional if you use one, or prepare and submit your own returns.

Second, it can cost you money to get your taxes done. The IRS says that nearly 60% of taxpayers use paid preparers for their returns. Of course, because more than 90% of individual income tax returns are completed by computer (through a paid preparer, with software, or FreeFile), knowing the places where deductions and credits are entered on the return is not critical to you; it's effectively done automatically.

Third, the tax law is very complicated and changing all the time. There have been several major tax acts impacting 2022 returns, including the Consolidated Appropriations Act, 2022, the Inflation Reduction Act of 2022, and earlier laws taking effect in 2022.

Fourth, you have to know what the tax rules are and can't claim ignorance to avoid taxes and penalties. Even if you use a tax professional or tax preparation software to prepare your return, you remain responsible for your taxes. The Tax Court has noted that using software is not an automatic excuse to avoid underpayment ...