Plan Ahead to Take the Stress Out of Tax Day
April 15 is a grim day for many people because it’s the deadline for filing income taxes. This day doesn’t have to be unpleasant or overwhelming. You can reduce your stress and improve your financial future simply by getting a jump on your income tax preparation early.
Here are 10 tax strategies to clear your path to successful tax preparation before the end of 2023:
1. Gather your records early so you have everything you need to get started. Gather your past tax returns, these will provide valuable insight into where you can save money on your taxes in comparison to previous years.
2. Determine how you’ll complete your return. You can prepare your own taxes or hire a tax professional, like Crystal Clear Tax, to walk you through the process. Initiate your search for a suitable tax preparer as early as you can, because if you wait until the last minute, you may find that the preparer you chose is inundated with others’ tax returns. If you plan to file on your own, you can plan and prepare ahead of time by reading up on current tax law changes, tax credits, and deductions.
3. Look to government resources for help. The Internal Revenue Service website and taxing authority websites for each individual state are valuable resources for individuals seeking tax help.
4. Estimate your taxes so you know what to expect. The IRS offers withholding calculators and other useful tools to help you determine what your taxes will be like prior to actually filing. This estimation will help you prepare for the actual filing, especially if you end up owing money when you actually file.
5. Make last-minute tax-deductible purchases. If it looks like you’ll owe money on your return, before the end of December, make any purchases that can give you an extra tax deduction. If you’re self-employed, purchase necessary items for your business.
6. Contribute as much as you can to your tax-advantaged retirement fund. This will reduce your income even further, leaving you less of a tax liability.
7. Donate cash or items before December 31st so you’ll receive your tax deduction for this year. Be sure to get a receipt!
8. File as early as possible if you expect a refund. The sooner you file, the sooner you’ll receive your tax refund.
9. Plan to E-File your return. There are a number of benefits to e-filing, or electronically filing your tax return. If you’re getting a refund, it’s quicker than mailing your return.
10. Invest in tax planning for a formal tax reduction strategy based on your 2022 tax return. If you’re interested in seeing a detailed plan, click book now on crystalclear-tax.com. You’ll be able to use these strategies in future years, not just 2024, and their validity could potentially last until your situation changes drastically, well worth the investment in tax planning.
The Reality is:
The best way to get the most out of your income taxes is simply preparation. With proper planning, you can maximize your deductions and simplify the filing process without stressing yourself out on the journey.
