Your Tax-Preparation Checklist

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Your Tax-Preparation Checklist

By Adam Brooks, CFP®

The new year is underway. While you may have made some resolutions, getting a head start on your taxes was most likely not one of them. Like it or not, tax season is just around the corner, and the better prepared you are, the sooner you can shake off that stress and spend your time doing what you love instead. 

To help you get organized and prevent procrastination, we’ve created a tax-preparation checklist for you to follow so you can have everything ready when it’s time to file.  

1. Gather and Organize Your Documents

You will start receiving various tax documents virtually or in the mail soon. Instead of letting them sit in a pile on your counter, create an organized system, such as a physical or online file folder. You will want to gather both income and personal documents, as well as any documents for deductions and credits if you choose to itemize. Here is a list of all the possible documents you may need, broken down by category. 

Income Information

  • 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.

Income-Reduction Documents

  • 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

Personal Information

If you want your tax-filing experience to be painless, you’ll also want to make sure you have all of you 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

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

Taxes Paid

  • State and local income tax
  • Real estate tax
  • Personal property tax

2. Has Your Situation Changed? 

Once you have gathered and organized everything you need to file your taxes, it’s important to make note of any changes to your financial and family situation that may have occurred in the past year that could impact how you file. 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, that 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 that 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.

3. Be Aware of Updates for the 2023 Tax Year

Aside from the retirement plan and HSA plan contribution limits, there are some additional 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. 

Seeing the Big Picture

Regardless of your filing status or financial situation, it pays to be prepared. Having everything in order helps you see your overall financial picture of the past year and where you stand heading into 2024. Whether you file your taxes yourself or choose to work with a tax professional, you need to have all your documents in order before that appointment. We hope this list helps you feel less overwhelmed and more confident in your finances this year. 

If you want to be proactive about tax planning and you don’t have a trusted advisor yet, we at ABLE Financial Group would love to help you experience confidence in every aspect of your financial plan. To learn more about our team and the ways we can help guide you, call 480.258.6108 or email today.

About Adam

Adam Brooks is Managing Director at ABLE Financial Group, a financial services practice that focuses on transition planning and simplifying the complexities of their clients’ wealth. As a CERTIFIED FINANCIAL PLANNER™ practitioner, Adam has been guiding individuals, businesses, and non-profit organizations toward their financial goals since 1993. Co-founding ABLE Financial Group in 2006, Adam oversees the practice, working with business owner clients, primarily focusing on succession planning and mergers and acquisitions (M&As).

Adam obtained degrees in finance and accounting from the University of Arizona and holds the CFP® certification. Adam was recognized as one of Barron’s Top 1,200 Financial Advisors in 2021 and 2022 and was named a 2022 Forbes Best-in-State Wealth Advisor. Outside of his work as a financial advisor, Adam has taught a variety of courses at surrounding community colleges, including Successful Money Management Seminars and Rich Dad’s CashFlow courses. Adam also previously hosted a radio show called The Truth About Money.

When not serving his clients, Adam actively serves his community in a variety of leadership positions. In 2011, Adam and co-founder Lee began funding the ABLE Financial Group Philanthropic Fund at the Jewish Community Foundation, allowing them to support some of their favorite organizations and causes today and into the future. Adam lives in Scottsdale with his wife, Cindy, their three sons, Jordan, Dylan, and Cameron, and their two dogs, Nelson and Sunny. Adam is active in his children’s lives, an avid cyclist, and enjoys local hikes with his family. To learn more about Adam, connect with him on LinkedIn.

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