The IRS recently announced January 23rd as the official start to the 2023 tax filing season! With W-2 and 1099 reporting deadlines mostly in the rear view mirror and that information starting to arrive in your mailbox, now is a great time to start accumulating your documentation and other information to prepare for the tax filing deadline. Here are some best practices that can ensure a smooth and stress-free process:
Review your 2021 tax returns:
It’s easy to forget what information has been captured on your previously filed tax returns. Taking a quick review of your 2021 tax returns will help with confirming the various sources of income and deductions that have been reported and ensuring that they are captured again in 2022, if applicable.
Gather all necessary documentation:
Compile all W-2 forms, 1099s, K-1 forms, and other documentation related to your income and expenses. Keep receipts for all deductible expenses, such as charitable contributions, medical expenses, and business expenses. Make sure you have a clear record of the amount of each expense and the date it was incurred.
Revisit tax plan prepared by your tax professional:
An effective tax plan prepared by your tax professional incorporates all significant income and expenses that will have an impact on your 2022 tax liability. Compare the tax plan to the list of documents that you have to determine if you have all relevant documentation.
2023 Taxes:
The first quarterly tax estimate for 2023 is due at the tax return filing deadline in April. Now is a great time to think about if you will have a significant change to your tax situation in 2023. If that is the case, work with your tax professional to update your estimates accordingly so that you don’t run the risk of over or under paying on your taxes.
By following these best practices, you’ll be well on your way to a stress-free and successful tax season. Remember to stay organized and seek help if you need it. And, most importantly, make sure to file your taxes on time to avoid any penalties or late fees!