End-of-year items that will prepare you for filing your 2023 taxes
Updated: Oct 3
As we head into Fall Weather, Football, Halloween, and the holidays, we are getting close to the 2023 Tax Filing Season. As this time of year seems to fly by, we at Whitaker-Myers want to ensure you are as financially prepared as possible. Within the Whitaker-Myers Group, we have an extension focusing primarily on tax advisory services. This article will discuss some items to review before year-end to prepare for a smooth, stress-free 2023 tax filing season.
Reviewing Pay Stubs
It is important to review paystubs to ensure proper withholding at work. Significant pay increases or changes to dependents can affect your tax withholding and cause you to under-withhold at work. Under-withholding at work can lead to surprise tax bills when it comes time to file in 2024 and can put households under unnecessary stress. I recommend consulting with a tax preparer to verify if you still qualify for the child tax credit or other credits you have previously claimed. By taking these steps – you can catch the under-withholding early and start planning how to fix the withholding before the tax filing.
Another essential year-end tax item to review is contributions to your retirement accounts (Roth IRA, Traditional IRA, 401(k)s, etc.). You want to ensure your retirement contributions to a Roth IRA are still allowed under normal circumstances. If your income in 2023 is above $218,000 for married filing jointly or $138,000 for single, your allowable contribution to a Roth IRA starts to be reduced. It is completely phased out at $228,000 for married filing jointly or $153,000 for single. If you end up over-contributing to a Roth because of income limits, detecting this early can help your Financial Advisor and tax preparer rectify the problem before filing the tax return. Failing to watch this can result in interest and penalties by the IRS. If you are contributing to a 401(k) – You can review your contributions to see how close you are to maxing out your contributions if you want to take advantage of that.
New Financial Situations
The most important item on this list is to discuss any abnormal financial situations with your preparer before year-end. Financial situations that can be considered abnormal can be selling your home, having any debt forgiven, starting a small business, investing in rental properties, opening up new investment accounts (IRAs, brokerage accounts, or money market), and receiving proceeds related to an inheritance. These financial situations can lead to new filing requirements with your tax return that you may not have had in any previous tax year. Meet with a tax advisor, and they can clarify for you what items they need to report the transaction properly on your tax return and help you plan for the tax ramifications of the transaction.
Setting yourself up for a successful tax-filling
Doing the above items will make you more informed about your financial situation and help you prepare for a smooth tax filing season. At Whitaker-Myers Tax Advisors, we pride ourselves on being there for all of our client’s tax questions and giving them peace of mind when navigating the complex tax environment. If you would like to schedule a tax consultation with CPA Kage Rush, please don’t hesitate to contact your financial advisor at Whitaker-Myers Wealth Managers or email Kage directly to schedule a meeting.