Year-end tax tips to consider
The end of 2022 is right around the corner, making this a critical time for individuals and businesses interested in minimizing tax obligations and maximizing refunds. In the coming weeks, there are things you can do that can improve your financial outlook and avoid unfortunate surprises in 2023.
Get organized now
You do not need to wait until April to organize your financial documentation; you can start the process today. If you are an individual, start collecting important receipts, pay stubs, bank statements and loan agreements. Keep them together so that they are easily accessible if you need them.
If you run a business, consider having a compliance checklist to stay on top of deadlines, obligations and employment information.
Scrutinize your contributions
With the remaining weeks, you can still make changes to your contributions. You might want to max out contributions to retirement accounts or give money to charity. These can help you take advantage of specific strategies to lower your tax bill.
Some people also get financial benefits from deferring income, scheduling elective medical care for this year and spending up the funds in flexible spending accounts.
Identify tax-related resources
If you have complicated finances, a history of tax mistakes, or even if you just don’t want to do your taxes, hiring someone to prepare your taxes for you can be worth considering. However, it can be stressful to find the right professional, and it takes time. Starting the process now can save you a lot of time and emotional energy.
We offer tips on how to find an honest tax preparer in a blog post from earlier this year.
Looking ahead
A lot can change in 2023. While we can’t see the future, we can plan for it. You can prepare for changes by reviewing employment agreements, changes in tax laws, and expected business expenses that may accumulate next year.
When you have a better idea of what is around the corner, you can avoid unwelcome surprises and make changes to improve your financial status today.