Buzz
Tax season isn't quite here yet, but waiting for the rush in March or April isn't the best approach. There are crucial documents to gather and end-of-year deadlines to meet, so you’ll be ready when filing season kicks off.
Gather and arrange your documents
It's never too early to start organizing your tax-related paperwork. While tax forms from your employer and financial institutions won't be available until late January, you can begin creating a list of documents you'll need to file your taxes. Once received, you'll want to check off items like last year’s return, income forms (W-2s, 1099s), and records for credits and deductions. These could include expenses for childcare, healthcare, education, charitable donations, and mortgage interest. Don't forget to download your paystubs and account statements, then save them in a dedicated folder.
If you're a freelancer or gig worker, begin collecting receipts for deductible expenses, estimated tax payments, and business income records.
Review any changes to your tax situation
If you've experienced significant life changes this year, you may need to engage in some last-minute tax planning and possibly adjust your withholding for the upcoming year. Some events that might impact your taxes include:
You got married or divorced, resulting in a change to your tax filing status.
You had a baby or added a dependent.
You bought a house or moved.
You changed jobs or lost your job.
Your income saw a significant increase or decrease.
You retired.
You filed for bankruptcy.
You can use the IRS's Tax Withholding Estimator to help determine if you need to adjust your withholding with your employer (if you're a W-2 employee, you'll need to file an updated Form W-4) or avoid surprises when it comes time to pay your taxes. You can also start planning for anticipated changes in 2025, like a promotion, bonus, or any of the life events listed above.
Set a reminder for your Q4 estimated tax payment
Self-employed individuals, such as contractors and freelancers, are required to make quarterly estimated tax payments—the final payment for the 2024 tax year must be submitted by January 15, 2025. If you haven’t paid throughout the year, you could face penalties unless your tax due is under $1,000 at the time of filing or you’ve already paid at least 90% of your current tax liability or 100% of the tax due based on your previous year's return.
TL;DR: Don’t miss the Q4 deadline, and make sure you've paid enough to avoid penalties.
Schedule a call with your tax professional
If you’re working with a tax expert, book a year-end meeting to review any changes in your tax situation and discuss ways to maximize your return. This may include contributing more to tax-advantaged accounts, increasing charitable donations, or discovering additional credits and deductions that could benefit you.
Your tax professional may include these consultations at little or no additional cost as part of your return preparation fee—while you're at it, be sure to schedule any other appointments you may need before the April filing deadline.
