It’s tax preparation time!

Tips to Organize your Tax Records

January 27th officially launches the tax season.

As those tax forms start coming in, here are some tips to help you stay organized to make filing your tax return efficient and with the least amount of potential stress:

•Gather your tax documents. Create a list of expected tax forms and then mark them off as they are received. This includes W-2s, 1099s, K-1s, and other statements from your employer, business, brokers, banks, or other sources. If you notice any errors, promptly contact the issuer to request corrected copies.

•Stay organized. As you gather your documents, designate a specific spot to keep everything together. Consider scanning the documents to store them digitally on your computer, or take photos with your phone as a backup. Missing paperwork is one of the most common reasons for delays in filing tax returns.

•Mark important deadlines. Make and keep your tax filing appointment in mind. While April 15 is the normal filing deadline, your deadline could vary depending on business returns and your tax appointment. But also keep April 15th in mind — it’s the deadline for filing your 2024 individual income tax return. It is also the due date for submitting gift tax returns, contributing to a Roth or traditional IRA for 2024, and paying the first installment of 2025 individual estimated taxes. Set reminders in your calendar to stay on track.

•Know business tax deadlines. If you’re involved in a partnership or an S corporation, remember that business tax returns are due by March 17th. For calendar-year C corporations, the deadline is April 15th.

•Review your mileage logs. If you’re claiming mileage for business, moving, medical, or charitable purposes, ensure your logs are complete, accurate, and up to date. Review and total them to avoid discrepancies.

•Check your child’s tax requirements. Your child might need to file a 2024 income tax return. Typically, a return is required if their earned income exceeds $14,600 or if their investment income (e.g., dividends, interest, or capital gains) is more than $1,300.

•Maximize IRA and HSA contributions. You can still make contributions for 2024 to your IRA or HSA until April 15th or the date you file your return, whichever is earlier. The 2024 IRA contribution limit is $7,000 (or $8,000 if you’re age 50 or older). For HSAs, the maximum is $4,150 for single taxpayers and $8,300 for families.

•Plan for an extension if needed. If you anticipate needing an extension, you must calculate your estimated 2024 tax liability. Even with an extension, you’ll need to pay any taxes owed by April 15th to avoid penalties and interest.

By following these steps, you can simplify the tax filing process and avoid unnecessary stress as deadlines approach. One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice.

For more information, visit www.fredtfoxiii.com.