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Get help with tax preparation
One of the first things to consider is, are you planning to file your own taxes this year, or are you planning to hire a professional to file them for you?
Certified financial planner Anna Sergunina, president and CEO of MainStreet Financial Planning in Los Gatos, California, says January is a good time to hire a tax accountant.
“Don’t wait until March,” she warned. “They probably won’t get any new customers before the end of the tax season.”
For those considering tax software, it might be a good time to compare options such as: IRS Free Fileoption if 2022 adjusted gross income is $73,000 or less.
Take action to reduce your tax liability in 2022
While many tax planning opportunities will be lost after the end of the year, there are still some ways to reduce your tax liability in 2022, according to experts.
Judy Brown, CFP and Senior Financial Advisor for SC&H Group in the Washington and Baltimore area, said:
I believe there is tremendous value in looking ahead and aligning both tax and financial planning strategies.
Judy Brown
Senior Financial Advisor, SC&H Group
for example, Estimated tax payments for the fourth quarter The deadline for 2022 is January 17th. This may reduce your tax liability or minimize late payment penalties.
You can also continue to make contributions to your personal retirement account through the April 18, 2023 tax filing deadline, said Brown, who is also a CPA. Roth IRA deposits are not deductible, Tax relief from pre-tax IRA contributionsdepending on your income and participation in a workplace retirement plan.
You can also earn a score by making a 2022 deduction. Contributions to a medical savings account By the tax deadline, assuming you have eligible health insurance.
Organize your tax form checklist
Ajay Kaisth, CFP and Principal at KAI Advisors in Princeton Junction, New Jersey, said: Tax return required for a return in 2022.
“If you haven’t already done so, review last year’s records and create a form checklist,” he suggested. W-2 from work 1099-NEC contract work forms, 1099-G Above all, for unemployment income.
You can receive it in your brokerage account 1099-B capital gains and losses 1099-DIV For dividends and dividends. Regarding the deduction 1098 For mortgage interest, 5498 For personal retirement account deposits: 5498-SA For example, donating to a health savings account.
You should wait to submit until you have copies of all required forms. Copies of these forms, known as “information returns,” are sent to the IRS and taxpayers each year. If your tax return does not match your form, the IRS system may send you an automatic notification, which may take some time to resolve.
“If you’re not sure if something is tax material, it’s a good idea to keep the documentation,” Kaisth added.
