As we approach the end of the year, it’s essential to prepare for the upcoming tax season. Being proactive with your financial planning not only ensures a smoother tax process but can also lead to potential savings. To assist you in getting organized, we’ve put together a comprehensive Year-End Financial Checklist. Whether you’re an individual or a small business owner in Tacoma, optimizing your financial strategy is key. Let’s delve into the checklist:
Collect Essential Documents:
– Gather crucial tax documents, including W-2s, 1099s, and deductible expense receipts. Maintain a dedicated folder to avoid overlooking any details.
Review Income and Expenses:
– Scrutinize your year’s income and expenses, addressing discrepancies or missing transactions early for efficient tax preparation.
– Compile receipts for charitable donations made during the year, ensuring proper documentation for deduction claims.
Maximize Retirement Contributions:
– Consider maximizing contributions to retirement accounts before the year-end deadline, boosting savings and potential tax advantages.
Health Savings Account (HSA) and Flexible Spending Account (FSA):
– Review HSA and FSA account balances, contribute before the deadline, and leverage associated tax benefits.
Review and Adjust Tax Withholdings:
– Assess current tax withholdings, adjusting for life changes that may impact tax liabilities, especially relevant for Tacoma residents.
Business Expenses for Small Business Owners:
– Small business owners should review deductible expenses, ensuring proper documentation for office supplies, travel, and equipment purchases.
– Evaluate your investment portfolio, considering tax implications and exploring tax-efficient moves like tax-loss harvesting.
Education Expenses and 529 Plans:
– Collect documentation for education expenses and review contributions to 529 plans, aligning them with your savings goals.
Check Your Credit Report:
– Monitor your credit report for inaccuracies, vital for maintaining a healthy credit score.
Evaluate Health Insurance Coverage:
– Review health insurance coverage, adhering to Affordable Care Act requirements, and be aware of potential penalties.
Plan for Estimated Taxes:
– If self-employed or a business owner, plan and submit estimated tax payments to avoid penalties.
Completing these tasks ensures a stress-free tax season. If you have inquiries or need personalized assistance in Tacoma, Book a consultation with McKinley Tax Service is here to support you on your financial journey. Wishing you a smooth and successful tax season!