Make tax time fun!
March 7, 2023
Sorry for this amount of reality! It’s March… which means you only have about five weeks left to sort things out and file your tax returns. The tax deadline is April 18, 2023 for him (some taxpayers in the disaster areas of California, Georgia, and Alabama have had their deadlines extended).
It is important to collect all the documents in order to complete an error-free tax return. As life gets more complicated, this can be a daunting task. Some forms will arrive in the mail, while others will need to be found online. We recommend creating a physical or digital folder to keep all your tax documents in one place. To help you stay organized, here is a list of the key documents you will need to complete your tax return.
- A Form W-2 will be provided by your employer and will show how much was paid and how much was withheld on the taxes and benefits provided.
- Form 1098 shows the amount you paid for mortgage or student loan interest.
- Form 1099 reports income earned from working as an independent contractor or from unemployment benefits.
- Form 1099-INT reports interest income for savings accounts.
- Form 1099-DIV is sent to investors who receive dividends and distributions.
- Form 1098-T is a tuition statement for higher education expenses.
- Form 1099-R reports distributions from pensions, pensions, retirement plans, and more.
- Records of stocks and other investments sold in 2022, including crypto trading and other digital assets. You need a cost base (the amount you paid for your investment) so that you can calculate the profit or loss of your investment.
- K-1 reports partner income, losses, profits and dividends.
- Documents, forms, and receipts to help determine if deductions should be itemized.
The value of your tax return doesn’t end the day you file it! Set aside time to review your 2023 returns and plans as the final step in the tax filing process. This is because most tax movements must be made by December 31st.st The rest of the tax year is time to implement your plans. Here are some things to check and plan for:
- Did you receive a standard deduction? If so, consider whether grouping charitable contributions or certain expenses into one tax year allows for better itemization.
- are you married? If so, compare your tax filings.
- Did you have AMT? If so, review strategies to reduce AMT, such as minimizing capital gains or maximizing retirement plan contributions and reducing income.
- Did you have to pay additional taxes or received a refund? If so, check and adjust any withholdings or dues.
- Do you have dependents? If so, consider whether you can claim the Child Tax Credit and/or Dependent Care Allowance.
- Is someone in your family in college? If so, consider whether you can claim Lifelong Learning Credits or the American Opportunity Tax Credit.
- Are interest and dividends reported? If so, consider whether interest is taxable or non-taxable, and whether dividends are regular or qualifying.
- Did you report a capital gain (or loss)? If so, consider carrying over to future returns.
There are some tax moves that still have time to affect returns in 2022.
- If eligible, please contribute to your IRA by April 18, 2023.
- Donate to HSA if you qualify through April 18, 2023.
Click here for tons of tax resources. Whether you prepare your taxes yourself or use a tax preparation service, we can make tax time fun by getting you organized, taking action, and optimizing your tax returns.