Tips For Prepping for the Upcoming Tax Season

As the year winds down, many individuals and businesses turntheir attention towards preparing for the upcoming tax season. Diligent taxpreparation can help minimize liabilities, maximize returns, and avoidpotential complications or penalties. Here are some key tips to prepare for thetax season ahead.

Tip #1 - Start early

First and foremost, start early, as procrastination can leadto errors or missed deductions. Initiate tax planning in advance of the filingdeadline to provide ample time to gather necessary documents, receive anyneeded assistance, and make any tax-related financial moves.

Tip #2 - Gather necessary documents

Assemble all the necessary documentation needed to filetaxes, which could include, but is not limited to:

• Income statements such as W-2s or 1099s
• Investment income records
• Documentation of expenses, deductions, orcredits
• Information for dependents
• Last year's tax return

Organizing these documents in advance can streamline the taxpreparation process and help ensure that nothing is forgotten.

Tip #3 - Understand the tax law changes

Tax laws are constantly changing. What was true for lastyear's tax season might not apply this time around. It's essential to befamiliar with the latest tax regulations or seek guidance from a financial ortax professional to understand how new laws may impact your situation.

Tip #4 - Make tax-deductible contributions

Maximizing contributions to tax-deductible accounts such asretirement savings or Health Savings Accounts (HSAs) is a strategy forminimizing one's tax burden. Also, don’t forget about charitable giving. Last,make these contributions before the end of the tax year.

Tip #5 – Hire a tax professional

Hiring a tax professional may provide personal tax guidancetailored to your specific circumstances. In some instances, it may bebeneficial to ask your financial and tax professionals to collaborate, as thiskeeps all parties informed.

Tip #6 - Check for changes in filing status

Life events, such as marriage, divorce, or the addition of anew family member, can change one's filing status, which can significantlyimpact a tax return.

Tip #7 - Consider tax planning for future tax years

While it is crucial to prepare thoroughly for the current tax year, it is also beneficial to consider future years. Specific financial strategies can be highly advantageous when planned and executed strategically, potentially yielding long-term tax savings.

In summary, tax preparation involves starting early, gathering necessary documents, understanding current tax laws, making deductible contributions, utilizing the services of financial and tax professionals, checking for changes in filing status, and considering future tax implications. Taking these steps to prepare for tax season can make the process smoother, less stressful, and help you file a tax return with confidence.

SWG4800556-0925c This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed. 

Sources:

https://www.irs.gov/filing/gather-your-documents
https://www.investopedia.com/articles/pf/07/tax_prep.asp