Ready for Taxes? Key Financial Details to Remember
Yes, it’s that most wonderful time of the year again… Tax Season. (Insert moans and groans here.) I get it. I am not sure it is anyone’s “favorite” thing to do, but do them we must!
Let's talk about which documents you need to gather ahead of the tax deadline, and review the retirement implications you should keep in mind through the process.
As a reminder, my team and I are not tax preparers. Please go to an experienced tax preparer or certified public accountant (CPA) to ask any specific questions about filing your taxes.
Information You Need to Gather
First, gather up the essential paperwork required to file your taxes. As you receive your documents in the mail (or they are emailed to you, and you print them off), keep them together and organized. I recommend placing a file folder in a handy place, such as your kitchen counter where you sort mail, to easily store your documents as they arrive.
Be sure you are aware of all tax deadlines - for the basic tax filer, that is Monday, April 15 - so you have things prepared on time!
Don’t wait until the last minute to seek help. Gathering your necessities right now will improve your chances of reaching and scheduling with a tax preparation service, should you need assistance.
Some of the documents you should have by now (most mailings are required to be sent by January 31) include:
Any W-2s proving your income for the year
Any 1099s (typically for contract workers) showing income
Retirement documents showing contributions to/payments received
Your home interest rate payments (Form 1098)
Your healthcare proof of insurance (Form 1095-B)
Receipts from any donations to qualified charities
Maximize Your Contributions
One of the best options to consider this time of the year is your annual contributions. You can contribute to your Roth IRA and/or any traditional IRA until the tax deadline. These will still count toward your 2023 taxes/rates.
You can consider increasing contributions now to your 401(b) or 403(b) plans to reduce your taxable income. It is a great way to save on the bottom line, especially if you owe money to the IRS, or simply add to your retirement investments. My office is available to help complete those last-minute contributions for you.
Make Adjustments for 2024
If you were surprised by a higher than usual tax bill, it can often be because you were not withholding the proper amounts throughout the year. If you find yourself owing more, make a plan now to correct your contributions and withholdings.
It is up to you how much you set aside (you can even add a particular dollar amount). Simply ask for a new W-4, or print one yourself online. You can even see the pages after the W-4 itself outlining the directions. (But if IRS verbiage has you scratching your head, seek the help of a CPA!)
In addition to your withholdings, adding to your retirement funds now can help to save you, since most plans allow for tax-free or tax-deferred savings.
Seek Our Assistance
The best way to be sure you are getting the very most from your retirement contributions, or even if you simply want to invest your refund, reach out to our office. We are happy to meet with you at any time to review your finances!
From saving for college, to creating a realistic retirement plan, we are here to help you at any stage of life! For more information, reach us through our website.
