Tips to Get Organized for a Stress-Free 2024 Tax Preparation

Tax season doesn’t have to be stressful. With a little planning and organization, you can save valuable time that can potentially save money. The key is to start early – gathering your financial documents and staying on top of various tasks throughout the year will make tax filing a much smoother process – whether you prepare your own return or use a professional CPA

Here are some steps you can take right now to optimize your tax preparedness for your 2024 return:

1. Organize Your Income Documents

Start by gathering all the income-related documents you’ll need for tax filing. This includes:

  • W-2s from your employer(s)
  • 1099s for freelance or contract work
  • 1099-INT/1099-DIV for interest and dividends
  • K-1s for any business partnerships or S corporations
  • Any other income records, such as rental income, alimony received, or other miscellaneous income.

Make sure you have accurate and complete records, as missing or incorrect documents can delay your filing and increase the likelihood of audits. It’s a good idea to set up a dedicated folder or digital file for these documents, keeping them organized as they arrive throughout the year.

2. Log Your Expenses and Deductions

Whether you’re filing as an individual or a business owner, keeping track of your expenses and deductions throughout the year can have a big impact on your tax liability. Common deductions include:

  • Medical expenses (if they exceed a certain percentage of your income)
  • Charitable contributions
  • Mortgage interest
  • Property taxes
  • Business-related expenses (for business owners and freelancers)

Keeping a running log of these expenses and organizing receipts can save you time and ensure you don’t miss valuable deductions. Consider using expense-tracking apps or accounting software to simplify the process.

3. Organize Investment Records

For those with investments, it’s crucial to keep detailed records of your purchases, sales, and dividends. Investment-related tax documents include:

  • Form 1099-B for the sale of stocks, bonds, or other securities
  • 1099-DIV for dividend income
  • 1099-INT for interest income
  • Form 8949 for reporting capital gains/losses

Make sure your brokerage firms send you these documents well before the tax deadline, and check that all information is accurate. If you’ve made any significant investment moves throughout the year, now is a good time to review them with your financial advisor or tax preparer to understand any potential tax implications.

4. Review Last-Minute Tax Planning Actions Before December 31st

There are several tax-saving opportunities that you can still take advantage of before the end of the year. The decisions you make before December 31st can have a meaningful impact on your 2024 tax return. This might include strategies such as:

  • Contributing to retirement accounts (like a 401(k) or IRA)
  • Maximizing health savings account (HSA) contributions
  • Reviewing capital gains and losses for potential tax-loss harvesting
  • Taking advantage of tax credits (such as the Child Tax Credit, Energy Efficient Home Credit, etc.)

Now is the time to review your tax situation and consider any last-minute planning actions. For businesses and individuals alike, careful year-end planning can significantly reduce your tax burden.

For more detailed information on what you can do before the end of the year, check out our Year-End Tax Planning Tips for Businesses and Year-End Tax Planning Tips for Individuals. These resources will guide you through specific strategies to help minimize taxes and optimize your financial situation.

Final Thoughts

Preparing for tax season doesn’t have to be a daunting task. By taking the time to get organized now, you can reduce stress and avoid scrambling at the last minute. With careful planning, you can ensure that your tax return is as efficient and accurate as possible. So, take these steps today to make tax time in 2024 a breeze!

Have questions or need assistance? Our team of experienced tax professionals is here to help. Contact us today to ensure you’re fully prepared for the upcoming tax season!

This post is shared by Davis & Hodgdon CPAs as a service to our clients, business associates and friends.  Recipients should not act on the information presented without seeking prior professional advice.  Additional guidance may be obtained by contacting us at 802-878-1963 (Williston) or 802.775.7132 (Rutland).

Similar Posts