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4 Simple Steps to Prepare for Next Year’s Taxes

Thomas Gogarty | Oct 04 2024 13:30
Getting ready for tax season may not be on the top of your list, but planning ahead can save you a lot of stress. Here are four practical steps you can take now to make next year’s tax filing much smoother.

1. Stay Organized.   Start by tracking your expenses regularly. Whether you use an app or a simple spreadsheet, keeping your financial records organized is key. Set up a filing system—physical or digital—that works for you to store receipts, bank statements, and tax forms. Additionally, set calendar reminders for important tax deadlines to ensure you never miss one.

2. Plan Deductible Purchases.   Consider making deductible purchases before the year ends. Depending on your situation, expenses related to education, home office setup, self-employment, or medical costs could lower your tax burden. Make sure these purchases are made before December 31st to take advantage of any deductions for the current tax year.

3.   Maximize Retirement Contributions. Take full advantage of retirement contribution limits. For 2024, you can contribute up to $23,000 to a 401(k) or 403(b) plan and $7,000 to an IRA. If you're 50 or older, you can make additional catch-up contributions. Increasing your retirement contributions reduces your taxable income, which could be especially helpful if you're close to moving into a higher tax bracket.

4. Check Your Credits. Be sure to check if you qualify for any tax credits. The IRS offers several, including:
  • Education Credits: If you or a family member is in school, you may be eligible for credits to offset tuition costs.
  • Energy-Efficient Home Improvements: If you've installed energy-efficient windows, doors, or appliances, you might qualify for a tax credit.
  • Clean Vehicle Credits: If you’ve purchased an electric or hybrid vehicle, there’s a chance you could receive a tax credit.
Tax planning doesn't have to be stressful. By taking these simple steps now, you can ensure you're better prepared when tax season arrives.

If you need help organizing your finances or want to discuss your tax situation further, schedule a consultation with Thomas P. Gogarty Jr. CPA. We're here to help you make the most of your tax strategy!
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