As we embark on the intricacies of tax season, here are valuable insights to streamline your tax return process and alleviate stress:
1. Compile Your Tax Information Efficiently: Collect essential documents like W-2s, 1099s, K-1s, and other forms from business, employers, brokers, and banks. Should errors be detected, promptly reach out to the issuer for a corrected copy. For more detailed tips, check out Forbes Tax Filing Tips.
2. Improve Document Management: Organize your records systematically. As you accumulate information, designate a dedicated space for your documents or consider digitizing them for convenient storage on your computer. Using your phone to capture images of documents serves as a useful backup. A well-organized approach minimizes the risk of missing crucial information, a common cause for tax return delays.
3. Set an April 15th Deadline Reminder: Mark your calendar with a reminder for the April 15th deadline. This date encompasses filing your 2023 individual income tax return, completing gift tax returns, contributing to a Roth or traditional IRA for 2023, and making the first installment of 2024 individual estimated taxes. Tailor the reminder to suit your schedule.
4. Stay Informed About Business Return Deadlines: If you're a partner in a business or a shareholder in an S corporation, take note of the March 15th deadline for filing these returns. For calendar-year C corporation tax returns, ensure submission by April 15th. Find more insights on tax season survival at Accounting Professor.
5. Audit Your Auto Log: Evaluate and organize the necessary logs supporting your qualified business miles, moving miles, medical miles, and charitable miles. A quick review ensures accuracy and completeness.
6. Assess Your Child's Income: Be aware of your child's income for potential tax filing obligations. Generally, a 2023 return is necessary if your child earned over $13,850 or had investment income exceeding $1,250 from dividends, interest, or capital gains.
7. Contribute to Your IRA and HSA: Capitalize on the opportunity to make 2023 IRA and HSA contributions until April 15th or your tax return filing date, whichever is earlier. The maximum IRA contribution for 2023 is $6,500 ($7,500 for those aged 50 or older), while the HSA contribution limits are $3,850 for singles and $7,750 for families.
8. Estimate Taxes for Extensions: If contemplating an extension, perform a swift calculation to estimate your 2023 tax liability. Note that any owed amount to the IRS should be settled by April 15th, even with an extension. For additional guidance on preparing for a smooth tax season, visit Benchmark Wealth Management.
By incorporating these tips and exploring the linked resources, you can enhance the efficiency of your tax filing process while reducing potential stressors.