by Jaya Pathak
8 tax tips to make filing easier in 2024
Tax season kicks off as the IRS launches e-filing for individuals. While some rush to file taxes, it’s wise to hold off briefly and organize your documents. Starting in 2017, the Tax Cuts and Jobs Act doubled the standard deduction for individual taxpayers, simplifying the tax code by reducing the need for itemizing deductions.
Despite this, the U.S. tax code undergoes frequent changes, with numerous pitfalls to avoid and details to manage. Consider seeking advice from CPAs and tax experts before filing for the 2023 tax year in 2024. Taking this step ensures a smoother and potentially more advantageous tax-filing experience.
Tax season is starting now, and the IRS is allowing individuals to file their taxes online. Many people are starting early, but it’s a good idea to wait and organize your documents first.
In 2017, the Tax Cuts and Jobs Act became law, which almost doubled the standard deduction for individual taxpayers. This change made the tax code simpler because fewer people had to list all their deductions.
Here are the 8 tax tips to make filing easier in 2024:-
01. Stay organized and monitor your tax documents upon receipt:-
It’s important to keep track of all your tax documents as they arrive. CPA Jason K. Moll suggests doing this because you may not have all the documents you need to file your taxes right away. If you store documents in different places, you might lose them or forget about some.
Tax documents can come through email, mail, or online, so it’s helpful to set up a digital folder to keep them organized. For paper documents, you can use a regular folder or a specific slot in your filing cabinet. This way, when it’s time to file your taxes, you’ll know exactly where everything is.
02. Gather all required documents before starting tax preparation:-
One of the main things that can make tax preparation slower is when you have to keep talking back and forth with your CPA or tax preparer to gather all the necessary information.
CPA Scott Rawitscher from Collaborative Business Solutions says it’s best to ensure your tax preparer has all the forms they need before starting. If your CPA gives you a tax organizer, use it to help gather everything. If you’re unsure about what you need, ask your tax preparer early in the process. It’s important to communicate and gather everything needed upfront to make the tax filing smoother.
03. Report your earned interest:-
It’s important to report earned interest on your taxes. CPA JP Geisbauer from Centerpoint Financial Management says that in 2023, many people opened new savings accounts or certificates of deposit to earn more interest. However, some people might not know that the interest earned from these accounts must be reported as taxable income.
Make a list of all your accounts that earn interest and include this information when you file your tax return. You don’t want to file your taxes and then find out later that you forgot to report interest income from an account. Keeping track of all your interest-bearing accounts helps you avoid this problem.
04. Go digital and file your taxes electronically:-
Filing taxes electronically is a smart move, according to CPA Lisa Greene-Lewis from TurboTax. It helps you receive your tax refund much quicker. The IRS states that 9 out of 10 electronically filed returns result in getting a tax refund within 21 days. Thankfully, you have options for e-filing. You can do it yourself or use tax preparation software programs. Either way, going electronic saves time and hassle, making the tax filing process smoother and faster.
05. Seek expert guidance and simplify your taxes:-
If doing your taxes seems overwhelming, consider getting professional help or using tax software to simplify the process, says Greene-Lewis. TurboTax offers various options for individuals, families, and small businesses, whether you want to file on your own, with assistance, or completely delegate the task.
Using Intuit’s AI-driven innovations and virtual expert platform, TurboTax enables users to file independently, receive guidance as needed, or hand off taxes for a virtual or in-person preparation experience. Regardless of the chosen method, TurboTax ensures maximum refunds and accuracy for all filers.
06. Mind your milestones and accounting for major life changes in taxes:-
CPA Dana Lashbaugh from Helium Financial Group advises considering major life changes when filing taxes, whether you’re doing it yourself or with professional help. This includes events like marriage, having a child, starting college, retirement planning, job changes, buying/selling a business, or purchasing/selling a home.
These life events affect your taxes, so it’s crucial to communicate them properly and early on to your tax advisor. By doing so, you can prevent unintended tax consequences and ensure your tax filings accurately reflect your current circumstances.
07. Timing matters: Paying Taxes on Time, Even with Filing Extensions:-
It’s important to know that asking for more time to file your taxes doesn’t mean you can wait to pay what you owe. Many people think that if they get an extension to file, they also get an extension to pay.
But that’s not true. The taxes you owe are still due by the regular tax deadline, which is April 15th for 2024. Even if you file for an extension, you still need to pay your taxes by April 15th. The extension only gives you more time to prepare and submit your tax forms, not to delay paying what you owe.
08. Maximize Your Tax Benefits: Stay Aware of Deductions and Credits:-
To simplify tax filing, keep track of all the deductions and credits you qualify for. Create a list based on past years’ deductions and changes in your finances in 2023. According to tax attorney Priya Mishra, deductions lower your taxable income, while credits directly reduce your tax bill.
Look out for deductions like charitable contributions, business expenses, and credits such as the Earned Income Tax Credit and Child Tax Credit. If you incurred significant medical or dental expenses in 2023, you might qualify for this deduction, especially if eligible medical expenses exceeded 7.5% of your adjusted gross income. Stay organized to maximize your tax benefits.