Fear not, tax season is not among us – yet – but wouldn’t you rather be armed with the knowledge and preparation to tackle it head-on come January? Taking your time and preparing as early as possible can save you a ton of headaches and alleviate that rushed feeling to submit your taxes by April 15th. Less room for error and, a bigger refund on your end. Let’s get into it!
Gather Your Tax Documents
First things first, you’ll need to gather the social security numbers of you and your dependents as well as the W-2 that you’ll receive from your place of work by January 31st. Keeping this information somewhere safe and handy is always a good idea. Next, you may receive special 1099 forms for a variety of reasons: unemployment compensation, pension, or retirement plan distributions to name a few. There are also forms like 1099-K and 1099-MISC for those working in the gig economy, and 1099-INT if you were paid interest at any point during the fiscal year. Gather and organize, you won’t regret it!
Look Into Deductions and Credits
Every year the standard deduction is adjusted for inflation, in 2024 the projected standard deduction is $14,600 for single filers, $29,900 for spouses filing jointly, and $21,900 for heads of households. If you’re wondering whether you should file standard or itemized, the larger figure always wins. However, it’s always best to take your time, weigh your options and choose the route that will yield the biggest tax break.
Check Your Withholding
Ensuring you’re withholding enough taxes each year can truly make a difference in the amount you’re receiving or contributing by the time tax season rolls around. If you owed taxes or received a large refund when you filed, this may be a sign you need to adjust your withholding. The IRS provides this handy Tax Withholding Calculator, you’ll need yours and your spouse’s pay stubs, other income documentation, and your most recent tax return.
Max Your Contributions
If you’re looking for a way to reduce your taxable income this season and have extra money to invest, you can consider increasing your IRA and HSA contributions. Paying a little more each month can significantly reduce the amount of taxes you pay. Maximum contribution amounts are $6,000 towards IRA and $3,650 for individuals towards HSA.
Consider Hiring a Pro
At the end of the day, hiring an expert CPA to help you navigate the murky waters that are taxes can be the best first step to preparing for tax season. Tax professionals can even help you secure a larger refund and of course help you identify IRS audit triggers. The peace of mind and security that comes with investing in a pro can make a world of difference come April 15th.
Taxes shouldn’t be scary; at Brock CPA we’re equipped to handle the most complex of cases. From strategy and planning to preparation, filing and compliance, we are with you every step of the way. Even in the case that you’re in need of tax resolution service, we’ve got your back. Ready to get a jumpstart on tax season? Give us a call at 904-330-0268 or shoot us an email at dbrock@brockcpa.com.
