Preparing for the 2024 Tax Filing Season

As the start of a new year is just around the corner, now is the perfect time to prepare your documents and receipts to ensure a smooth filing process. MKHS Tax Group is here to guide you through the key steps you need to take to get organized. Being proactive with your tax preparation not only reduces stress but also minimizes the risk of errors or missed deductions. Let’s dive into what you should focus on as you gear up for the 2024 tax filing season.

Gather and Organize Your Financial Records

The first step in tax preparation is gathering all your financial documents. This includes:

Income Documents: Collect all W-2s, 1099s, and other income-related forms. Ensure you’ve accounted for all sources of income, including side gigs and investments.

Expense Records: Keep receipts and records for deductible expenses, such as medical costs, charitable contributions, business expenses (if self-employed), and educational expenses.

Bank and Investment Statements: Include bank account summaries, investment account statements, and any records of dividends, interest, or capital gains.

Organize these documents in a way that makes sense to you—whether in a physical folder or a digital filing system. Proper organization helps ensure that nothing gets overlooked when it’s time to file.

Review and Categorize Receipts for Deductions

Receipts can be a goldmine for tax deductions. Go through your receipts and group them by category to streamline the deduction process. Key categories to consider include:

Medical and Dental Expenses: Out-of-pocket costs such as doctor visits, prescriptions, and medical devices.

Charitable Contributions: Donations to qualified organizations, whether in cash or goods. Remember to get written acknowledgment for contributions over $250.

Business Expenses: If you’re self-employed, include receipts for office supplies, equipment, and other business-related costs.

Education Expenses: Costs such as tuition and fees, if applicable to tax credits like the Lifetime Learning Credit.

For digital receipts, create labeled folders on your computer or cloud storage to keep everything accessible.

Ensure Accuracy with Forms and Documentation

Tax forms often contain critical details needed for accurate filing. Double-check your forms for any discrepancies or missing information. For instance:

• Verify that your W-2 matches your final pay stub.

• Ensure 1099 forms accurately reflect payments received.

• Cross-check mortgage interest statements and property tax documents with your lender’s records.

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If you’re missing any forms, contact the issuer promptly to avoid delays in filing.

Take Advantage of Tax Deductions and Credits

Now is a great time to review potential deductions and credits you may qualify for. For example:

Standard Deduction vs. Itemizing: Determine which option benefits you the most. The standard deduction for 2024 has increased slightly, so check the updated amounts.

Earned Income Tax Credit (EITC): If you meet income requirements, this credit can significantly reduce your tax liability.

Education and Energy Credits: Credits like the American Opportunity Tax Credit or Residential Energy Efficient Property Credit can lower your taxable income.

Consult a qualified tax professional if you’re unsure about eligibility for specific credits.

Recordkeeping Best Practices

Maintaining organized records isn’t just about tax season—it’s a year-round practice that benefits your financial health. Here are some tips:

Use Software: Consider accounting software or apps to track income and expenses throughout the year.

Scan and Save: Digitize paper receipts to prevent fading or loss. Many apps let you categorize receipts as you go.

Retention Period: The IRS generally recommends keeping tax records for at least three years, but some situations (like reporting a loss from worthless securities) require longer retention.

If your tax situation is complex or you’re unsure about certain deductions, consulting with a tax professional can make all the difference. Enrolled Agents are federally licensed and specialize in taxation, offering expertise to help you navigate even the trickiest tax scenarios. By taking these steps, you can simplify the filing process and maximize your potential tax savings. If you have questions or need further assistance, reach out to us at info@mkhstaxgroup.com. We’re here to help ensure your 2024 tax season is as stress-free as possible.