Your Tax Preparation Checklist for 2024
Like it or not, tax season is here. As the saying goes, if you fail to plan, you plan to fail. Besides, the sooner you prepare to file your taxes, the sooner you can shake off that stress and spend your time doing what you love instead. We know organizing your tax documents may be the last thing on your list (if it’s on there at all). That’s why we have created a comprehensive tax preparation checklist for you to follow which can help you feel more confident going into your tax appointment.
Organize Your Personal & Income Information
You’ll start receiving various tax documents virtually or in the mail soon, so instead of letting them sit in a pile on your counter, create an organized system for the following.
- Form W-2: These are issued by employers and show your wages and tax withholdings. They are supposed to be mailed by January 31.
- Form 1099-MISC: These report income you have received as an independent contractor or freelancer. You should receive one from each person or company that pays you.
- Form 1099-INT: This form will show any interest you have earned.
- Form 1099-R: This form reports income received from annuities, IRAs, or pensions.
- Form 1099-DIV: Any dividend income you earn is reported on this form.
- Form 1099-B or 1099-S: You will receive these if you have any income from the sale of property or stock.
- Form 1098: You will get this from your mortgage company reporting the interest that you paid.
- Form 1098-T: This reports payments of qualified tuition and expenses.
- Form 1095-A or 1095-C: These forms report your healthcare coverage for the year and your premium tax credit, if applicable.
- Schedule K-1 (Form 1065, Form 1120S, or Form 1041): This reports income for a partner, a shareholder, or an income beneficiary of an estate or trust. The Schedule K-1 normal deadline can be as late as April 15th.
- Form 1098-E for student loan interest paid, or loan statements for student loans received
- Form 1098-T for tuition paid or receipts from the institution you or your dependents attend
- Receipts for any qualifying energy-efficient home improvements
- Records of IRA contributions made during the year
- SEP, SIMPLE, and other self-employed pension plan information
- Records of medical savings account (MSA) contributions
- Moving expense records
- Self-employed health insurance payment records
- Alimony you paid if your divorce was finalized before December 31, 2018
If you want your tax-filing experience to be painless, you’ll also want to make sure you have all of your and your dependents’ personal information available, such as:
- Social Security numbers and birth dates
- Copies of last year’s tax return (helpful, but not required)
- Bank account number and routing number, if you wish to have your refund deposited directly into your account
Gather Documents for Itemization
If you’re planning to itemize your deductions this year, you’ll need records to include your totals and provide proof.
Deductions and Credits
- Childcare costs: provider’s name, address, tax ID, and the amount paid
- Education costs: Form 1098-T, education expenses
- Adoption costs: SSN of the child; records of legal, medical, and transportation costs
- Form 1098: Mortgage interest, private mortgage insurance (PMI), and points you paid
- Investment interest expenses
- Charitable donations: cash amounts and official charity receipts
- Medical and dental expenses paid
- Casualty and theft losses: the amount of damage, insurance reimbursements
- Records/amounts of other miscellaneous tax deductions: union dues; unreimbursed employee expenses (uniforms, supplies, seminars, continuing education, publications, travel, etc.)
- Records of home business expenses
- State and local income tax
- Real estate tax
- Personal property tax
Updates for the 2023 Tax Year
There are some important changes to keep in mind when filing your 2023 tax return. Depending on your filing status, some taxpayers may receive significantly smaller refunds due to these changes.
- The Child Tax Credit will remain at $2,000 per dependent in 2023 and in 2024.
- The Earned Income Tax Credit moved up to $600 for eligible taxpayers with no children.
- The Child and Dependent Care Credit allows you to claim from 20% to 35% of your care expenses up to a maximum of $3,000 for one person, or $6,000 for two or more people.
Stay on Top of Tax Changes
Those lists cover the details of what you’ll need in front of you to thoroughly fill out your tax return. But there are also a few things to think about that could impact how you file, such as any changes that have occurred this year. Did you add another child to your family? Did one of your children start college? Did you start taking withdrawals from a retirement account? All these changes need to be reflected on your tax return but won’t show up on prior returns.
Specifically, you should stay on top of annual changes to retirement plan contribution limits. For the 2024 tax year, you can put up to $7,000 in any type of IRA ($6,500 for the year 2023). If you are over age 50, the amount goes up by $1,000 with the catch-up contribution. 2024 annual contribution limits for 401(k)s, 403(b)s, and most 457 plans are $23,000. If you are 50 or older, your yearly contribution limit goes up to $30,500. And if you are eligible to contribute to an HSA, you can save $4,150 if you have single medical coverage and $8,300 if you are covered under a qualifying family plan in the year 2024 (up from $3,850 and $7,750 for the 2023 tax year, respectively). If you are 55 or older, those limits go up another $1,000. Keep in mind, for IRAs and HSAs you have until April 15th, 2024, to contribute for the 2023 tax year.
A knowledgeable financial professional can help you understand any tax law changes and how they affect you.
Prepare for the Future
It’s important to be as prepared as possible before filing your taxes or meeting with your tax professional. This helps you save money by minimizing your tax liability and utilizing all the tools available to you. Taxes are complicated, to put it lightly, so it helps to work with a professional who understands your unique situation and can help you with tax preparation in light of your overall goals and financial plan.
If you want to be proactive about tax planning and you don’t have a trusted advisor yet, we at Rosamond Financial Group would love to help you experience confidence in every aspect of your financial plan. Book a free introductory meeting online! You can also see what clients are saying about working with us.
Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with over two decades of industry experience. He provides comprehensive wealth management and financial services to successful business owners, corporate executives, and affluent retirees who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch, a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing email@example.com or scheduling a call on his online calendar.