Keep Tax Time Simple: Year-Round Planning Tips

The IRS shared some helpful reminders recently, and we’ve summarized them here so you can act now to make next tax season smoother.

Keep your records in check.

Whether you’re old-school with file folders or all-in on digital, having a system that tracks income, deductions, and major life changes saves time and headaches later. Don’t wait until January. Keep it updated as things happen.

Know your filing status.

It’s not just a checkbox. Your status impacts deductions, credits, and how much you owe. If your family situation changes such as marriage, divorce, a new child, or a loss, it could affect your taxes. The IRS has an interactive tool that helps if you’re unsure.

Understand your AGI.

Your adjusted gross income (AGI) affects your tax rate. It is your income from all sources minus any adjustments. Generally, the higher it is, the more you’ll pay. Smart planning throughout the year, like contributing to retirement accounts, can lower your AGI and your tax bill.

Check your withholding.

Your tax bill shouldn’t surprise you. Use the IRS’s Withholding Estimator if you’ve had a raise, changed jobs, or experienced any major financial change. If adjustments are needed, update your Form W-4 with your employer.

Update your info.

Moved? Changed your name? Let the IRS and Social Security Administration know. File IRS Form 8822 for address changes. Keeping your information current prevents delays when it’s time to file.

Save for retirement.

Contributing to a 401(k) or traditional IRA helps build your future. It can also reduce your taxable income now.

Want help getting your tax plan in order now, during these slower summer months? That’s what we’re here for. Contact us to get started.