Your Essential Tax Season Tips for 2024: Get Prepared Early!

As we head toward the end of 2024, it’s the perfect time to start thinking about your tax filing for the upcoming season. Whether you're a seasoned filer or a first-timer, preparing early can help you avoid stress, maximize your refund, and even lower your tax liability. Here are some essential tax season tips to ensure you’re ready when tax season rolls around.

1. Start Organizing Your Documents Now

One of the most effective ways to prepare for tax season is to get your paperwork in order well ahead of time. The IRS typically begins accepting returns in late January, but the sooner you start gathering documents, the easier it will be to file without last-minute stress. Here’s a quick checklist of documents you’ll need:

• W-2s from your employer(s)
• 1099 forms for freelance or contract work
• 1098 forms for mortgage interest or student loan interest
• Receipts for deductible expenses (medical, charitable donations, etc.)
• Form 8889 if you have a Health Savings Account (HSA)
• Other income records such as rental income or dividends

2. Review Tax Law Changes

Tax laws can change from year to year, and 2024 is no exception. Keeping an eye on these changes can help you make the most of available credits and deductions. For example, certain tax credits, like the Child Tax Credit and Earned Income Tax Credit (EITC), may have updates to their eligibility thresholds or amounts. If you’re not sure how these changes affect you, it’s worth doing some research or consulting a tax professional.

For 2024, the IRS will also be focusing on increased enforcement of reporting requirements for digital currency transactions and other modern income sources. If you’ve participated in cryptocurrency trading, investing, or similar activities, make sure to track those transactions carefully.

3. Maximize Deductions and Credits

Don’t leave money on the table! Deductions and credits reduce your taxable income or tax due, and many taxpayers miss out on them simply because they aren’t aware they qualify. Common examples include:

• Student Loan Interest: You can deduct up to $2,500 in student loan interest paid, even if you don’t itemize your deductions.
• Medical Expenses: If your medical expenses exceed 7.5% of your adjusted gross income (AGI), you can deduct them.
• Retirement Contributions: Contributing to a traditional IRA or 401(k) can lower your taxable income. Even contributing as little as $500 can make a difference, especially if you're self-employed and make a contribution to a SEP IRA.
• Charitable Donations: Whether you donate money or goods, these can be tax-deductible if you keep proper records.
• Childcare Expenses: The Child and Dependent Care Credit can help offset costs for parents paying for childcare.

4. Consider Itemizing Deductions vs. Standard Deduction

For many taxpayers, the standard deduction is the easiest route, but you may benefit from itemizing deductions if your deductible expenses exceed the standard amount. The standard deduction for 2024 is projected to be $27,700 for married couples filing jointly, and $13,850 for single filers.

Some common expenses that qualify for itemizing include mortgage interest, property taxes, state and local taxes, medical expenses, and charitable contributions. It’s important to compare both options (standard vs. itemized) to see which will result in the lowest tax bill.

5. Consider Tax-Advantaged Accounts

Maximizing contributions to tax-advantaged accounts is a key strategy to reduce your taxable income. In addition to retirement accounts like IRAs and 401(k)s, consider other options such as:

• Health Savings Accounts (HSAs): If you have a high-deductible health plan, you can contribute to an HSA and reduce your taxable income. Plus, the funds grow tax-free.
• Flexible Spending Accounts (FSAs): These are commonly offered by employers to help with medical expenses or dependent care.
• 529 College Savings Plans: Contributions to a 529 plan for education can sometimes be tax-deductible, depending on your state.

6. Estimate Your Tax Liability Early

Waiting until the last minute to prepare your taxes can be a recipe for stress. Instead, consider using tax software or working with a tax preparer to estimate your potential tax liability ahead of time. This allows you to adjust your withholding or plan for any estimated tax payments. If you owe a significant amount, knowing this early can help you avoid a big tax bill in April.

7. Plan for Tax Withholding Adjustments

If you’ve had major life changes in the past year—such as getting married, having a baby, or changing jobs—you may want to adjust your tax withholding. Check your W-4 form to ensure you’re having the correct amount of tax withheld from your paycheck. Not enough withheld? You could face an unexpected tax bill. Too much? You could get a large refund, but you’ll have missed out on potential investment gains.

8. Use Tax Software or Hire a Professional

If your taxes are straightforward, tax software can be an easy and affordable way to file your return. It will walk you through the process and help ensure you're claiming all available deductions. But if your tax situation is complex—especially if you have multiple sources of income, investments, or own a business—it may be worth hiring a certified tax preparer to help you navigate the details.

9. Beware of Scams and Fraudulent Tax Preparers

The IRS warns about the potential for tax scams and fraudulent preparers, especially during tax season. Be sure to verify the credentials of any professional you hire, and never give out personal or financial information unless you’re absolutely certain the request is legitimate.

Also, keep in mind that the IRS will never initiate contact via email, phone, or text message. If you receive any unsolicited communication from someone claiming to be from the IRS, be cautious.

10. Stay on Top of Filing Deadlines

The tax deadline for most individual filers is April 15, 2025. If you need more time, you can request an extension, which gives you until October 15, 2025, to file your return. Keep in mind that an extension only applies to the filing deadline; you’ll still need to pay any taxes owed by April 15th to avoid penalties and interest.

Conclusion

Tax season doesn’t have to be a stressful time of year. By staying organized, understanding changes to tax laws, maximizing deductions and credits, and planning ahead, you can streamline your tax filing process and even save money. Whether you’re preparing on your own or working with a professional, taking the time now to prepare for the 2024 tax season can set you up for success.

Happy filing!

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