How to Prepare for Tax Season Now
Though the 2022 tax season is officially over, there are plenty of things you can do now to help you get ahead of the game for the 2023 tax season. Making sure you have all the correct documents and information ahead of time will help you avoid any hiccups when tax season arrives. Here are some tips on preparing for the upcoming tax season, brought to you by the professionals at Paramount Tax.
Review Your W-4 Withholding
Ensuring that your W-4 withholding amount is correct before you file your taxes will help you avoid unnecessary penalties or an incorrect refund. Thoroughly review your paychecks from the last year to ensure that your employer is withholding the proper amount based on your W-4 filing status and deductions. If you have experienced a significant life update within the past year (such as getting married, buying a home, having a baby, or starting a new job), be sure to adjust your W-4 withholding as needed. These exciting milestones also make for significant financial changes that can determine your filing status and affect your tax liability.
Track Your Expenses
and Deductions
Throughout the year, keep track of any business-related expenses and deductions you may need to account for on your return. This can include expenses such as gas used during a business trip, supplies bought for business-related activities, and charitable donations.
Organize Your Tax Documents
Keeping your tax records organized can make completing your tax return without mistakes easier. This is especially important if you have a large amount of paperwork to navigate. Consider using a file system or digital tool to help you prepare all the necessary tax documents, such as your W-2 forms and your previous year’s deduction.
Maximize Your Retirement Contributions
If you have a retirement fund, such as a 401(k) or IRA, consider contributing the maximum amount before you file your taxes. Not only will this help you save for the future, but it may also lower your taxable income.
Consider Filing an Extension
Even with preparation, tax season can easily slip away from you. Consider filing an extension with the IRS for an extra six months to give yourself more time to ensure that all your information is accurate. This extension will allow you to file in October rather than April. Keep in mind, though, that any interest you owe on your taxes will continue to accrue during your extension period.
Consider Hiring a Tax Professional
If you aren’t sure where to begin in your preparation, consider hiring the professionals of Paramount Tax to assist you with your taxes. At Paramount Tax, our professionals can help you prepare for tax season now, so you aren’t caught by surprise in the spring. We’ll walk you through the entire process and help with any other questions. Contact our accounting firm today for a free consultation to help prepare for the 2023 tax season.