🗂️Keep in Mind Four Tasks to Complete Now for Tax Season

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Tax time isn't here yet, but that doesn't mean you should be sitting idle, waiting for the rush to start in March or April. There are important documents to collect and end-of-year deadlines to meet so you're ready to go when filing season begins.

Collect and organize documents​

It's not too early to start getting your tax-related documents in order. While tax forms from employers and financial institutions won't be issued until late January, you can make a list now of paperwork you'll need to file your return so you can check it off once received. This may include your previous year's return, income statements (W-2s and various types of 1099s), and documentation for credits and deductions, such as expenses related to childcare, healthcare, and education as well as charitable contributions and mortgage interest. Download your paystubs and account statements and save them in a folder together.

If you're self-employed or a gig worker, start gathering receipts for deductible expenses and estimated tax payments as well as business income records.

Assess changes to your tax situation​

If you had any major life changes this year, you may need to do some last-minute tax planning and possibly adjust your withholding heading into the new year. Some examples of events that can affect your taxes include the following:

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  You got married or divorced (and your tax filing status is changing).
  
  
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  You had a baby or added a dependent.
  
  
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  You bought a house (or moved).
  
  
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  You changed jobs (or lost your job).
  
  
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  Your income significantly increased or decreased.
  
  
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  You retired.
  
  
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  You declared bankruptcy.
  

You can use the IRS's Tax Withholding Estimator to determine if you need to adjust your withholding with your employer (if you're a W-2 employee, you'll need to submit an updated Form W-4) or otherwise get ahead of any surprises with your tax bill. You can also start planning for changes expected in 2025, such as a bonus, promotion, or any of the life events listed above.

Set a reminder for your Q4 estimated payment​

Self-employed taxpayers, including contractors and freelancers, have to make quarterly payments of estimated taxes—the final estimated payment for the 2024 tax year is due on January 15, 2025. Failure to pay throughout the year can result in penalties unless you owe less than $1,000 when you file or you've paid the smaller of 90% of your tax liability for the current year or 100% of the tax on your previous year's return.

The TL;DR: don't miss the Q4 deadline, and make sure you've covered enough to avoid penalties.

Schedule a call with your tax pro​

If you work with a tax professional, schedule an end-of-year planning call to go over any changes to your tax situation and discuss strategies to optimize your return, such as making additional contributions to tax-advantaged accounts, increasing charitable giving, or finding additional credits or deductible expenses.

Your tax pro may offer these sessions at low or no cost with your return preparation fee—and while you're at it, go ahead and schedule any necessary appointments between now and the April filing deadline.
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