Your Last-Minute 2024 Tax Filing Season To-Do List
Tax season is nearing the first deadline for 2024. If you haven’t yet done so, now is the time to get prepared. Whether you meet with a tax professional or prepare your taxes yourself, proper planning helps the processes go more smoothly and may reduce the risk of costly errors. Check out the tips below and prepare to tackle this tax season with confidence.
To-Do #1: Gather All of Your Forms
By now, you’ve likely started to receive the forms you need to properly complete your tax return. If you are expecting a large refund, you will want to make a list so you don’t forget anything that could affect it. Once you receive your documents, first give them a scan to make sure they are correct and contact the sender if there are any discrepancies. Remember, even a simple misspelling can cause a flag on your tax return. Inspect all of your documents carefully.
Some of the forms you will need to look out for include the following:
- W-2s from your job
- SSA-1099 for Social Security benefits
- 1099s for additional income, interest, gains and losses
- 1095-A for government marketplace health coverage
- 1098s for reporting interest and tuition payments
- W-2Gs for any gambling winnings
- Schedule K-1s for company ownership (K-1s can take significantly longer to arrive)
To-Do #2: Round Up Your Receipts
If you have your own business or plan to itemize your deductions, you will need to record expenses so that you can take advantage of any available write-offs. Gather all the receipts for business expenses, medical expenses, and other expenses that can be listed on your Schedule A or Schedule C. Receipts can be physical receipts or bank and credit card statements that show payments for these items. Once you’ve gathered them, organize them by type so that they are easy to find when you begin filing.
To-Do #3: Acquire Records of All Charitable Contributions
Throughout the year, you may have made donations to tax-exempt organizations. These donations can provide you with charitable contribution write-offs, which typically require itemized deductions and documentation. Most organizations, from churches to fundraisers, can provide a record of your tax-deductible contributions. In particular, if you have made a Qualified Charitable Distribution (QCD) from an IRA, be certain to prepare proof of that contribution and communicate this to your tax advisor. This is critically important because a QCD does not generate a 1099 which you would normally provide to your tax advisor. If you are working with a good financial advisor who specializes in retirement, he or she will likely have brought this to your attention and provided you with what you need.
To-Do #4: Create a List of All Personal Information
While you likely know your Social Security number by heart, you will want to jot down the Social Security numbers of any dependents you wish to claim. This way, they are easy to access, and you can be sure they’re accurate. Also, make a list of addresses for any properties you own, as well as the dates on which they were bought or sold.
To-Do #5: Get a Copy of Last Year’s Tax Return
If you are using the same preparer as the previous year, they should have a copy of your tax return. If not, find your old copy and have it ready with your other tax items. Being able to reference your previous return can help you see what you filed last year, so you don’t overlook something this year.
To-Do #6: Determine How You Will Spend Your Refund
If you expect to get a refund this year, you might want to take some time to consider what you plan to do with your return once you receive it. You have the option to apply your payment toward your tax bill next year if you believe you will owe. This can be a good idea for those who pay estimated taxes throughout the year, as it can often put a chunk toward your first installment.
Alternatively, you can choose to send the money directly to a checking or savings account or contribute it to an IRA, health savings account, or education account. If you plan to split the funds between accounts, you will need to complete Form 8888.
Don’t let tax preparation leave you feeling overwhelmed. Enjoy less stress and a smoother process by preparing everything you need for filing this tax season. Finally, don't forget that tax preparation is generally scorekeeping for what took place the prior year. There is a fundamental difference between retroactive scorekeeping and proactive tax planning. Therefore, let the filing of your taxes this year be the beginning of how to reduce your lifetime tax bill, not just the end of the tax filing for last year.
Need help with your tax planning and management? Contact us for a free conversation.
By Christian Cordoba
CERTIFIED FINANCIAL PLANNER™
Founder, California Retirement Advisors