As the tax filing deadline draws near, we wanted to provide you with some helpful filing tips and resources while remining you of important financial and tax opportunities still available.
Form 1099s
If you received income from investments, interest, dividends, independent contractor work or education savings plan, then you should be familiar with IRS Form 1099.
One of the most frustrating aspects of Form 1099s is their availability timeline. If you have a brokerage account or a retirement account, then you should have already received your Consolidated Form 1099. However, many initial 1099s often contain estimates that are subsequently corrected. Therefore, we recommend to
Thoroughly review all Forms 1099 for inaccuracies and promptly report any erros
File your tax return no earlier than the 2nd 1099 Correction Cycle, which is around mid-March.
E-File
To expedite your tax refund, file your tax return electronically. Paper returns typically take much longer for the IRS to process, leading to delay. Additionally, ensure that that you request the refund to be deposited directly into your bank account.
Beware of Scammers
If you've fallen victim to identity theft, we encourage you to E-File your tax return sooner rather than later. Filing early can safeguard you against tax-related identity theft, as perpetrators often use stolen tax identification numbers to submit fraudulent returns early in the tax season, attempting to claim illegitimate refunds. By filing early, the IRS will process your return before any fraudulent ones.
As an additional layer of security, consider applying for an identity-protection PIN. The IP PIN is a six-digit number assigned by IRS to help verify a taxpayer’s identity.
Contribute to Your IRA
Although the tax filing season is well underway, there is still time to make a regular IRA contribution for 2023. You can contribute up to $6,500 for 2023 (or $7,500 if you reached the age of 50 or older on or before December 31, 2023) until your tax return due date, which is April 15, 2024.
You are allowed to contribute to either a Traditional IRA, a Roth IRA, or both, provided your total contributions remain within the annual limit or, if lower, 100% of your earned income. Additionally, you might have the option to contribute to an IRA for your spouse for the year 2023, even if your spouse had no income in 2023.
Traditional IRA
If you received taxable compensation in 2023, you're eligible to contribute to a Traditional IRA for 2023. However, if you or your spouse were participants in an employer-sponsored retirement plan during 2023, the deductibility of your contributions may be limited or entirely eliminated, depending on depending on your tax filing status and Modified Adjusted Gross Income (MAGI).
Nondeductible IRA
If your MAGI exceeds the IRS income limits and you are unable to make a deductible contribution to a Traditional IRA, you can always make a nondeductible (after-tax) contribution, irrespective of your income level.
Keep in mind that if you're eligible to contribute to a Roth IRA, it is generally more advantageous to contribute to a Roth IRA instead of a Traditional IRA or a nondeductible IRA.
Roth IRA
You can contribute to a Roth IRA if your MAGI is within the income limits set by the IRS.
Contribute to Your HSA
If you have an HSA-eligible High-Deductible Health Plan and haven't contributed to it yet or haven't fully maxed it out in 2023, you have until April 15, 2024, to fill this gap and take advantage of this powerful, triple-tax advantageous, savings account.
The HSA contribution limit for 2023 is:
$3,850 for self-only coverage, and
$7,750 for family coverage.
Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
Additional Resources for Filing Your Tax Return
Our "What Documents Do I Need to Collect for Filing My 2023 Tax Return" checklist covers the key issues to consider when preparing to file your taxes, such as:
Documents and information to gather for your sources of income.
Documents and information to gather for potential tax deductions.
Documents and information to gather for potential tax credits.
Other important nuances to consider when preparing to file your taxes.
In addition to that, you can also use the following two resources:
When it comes to taxes, it is always a smart idea to work with a tax professional. However, if you have any questions for us about your financial plan or tax situation, or please don't hesitate to contact us and schedule a time to discuss this further.