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Preparing For Filing Taxes: Things to Keep in Mind

Preparing For Filing Taxes: Things to Keep in Mind

February 20, 2024

With filing time rapidly approaching, we’d like to briefly touch on a few tax-related topics people often ask us about.


Which retirement plans can you contribute to by the filing deadline?

You can contribute to an IRA until the tax filing deadline, potentially reducing your tax bill. For the tax year 2023, the deadline is April 15, 2024, with a contribution limit of $6,500 or $7,500 if you're 50 or older. In 2024, the limits rise to $7,000 and $8,000. Extensions may apply for certain circumstances, such as federal disaster declarations or holidays. 

Contributions to a traditional IRA are usually tax-deductible, growing tax-free until withdrawal after age 59 ½. For example, a $6,500 contribution could save $1,560 in taxes for someone in the 24% tax bracket. This opportunity to reduce taxable income for 2023 ends on April 15, 2024.

Other IRAs, like SEP IRAs for small businesses or self-employed individuals, offer higher contribution limits, nearly ten times those of standard IRAs. Last-minute contributions can be made to both personal and SEP IRAs, with the possibility of filing extensions for additional time.


What documents should I have for filing taxes?

Filing your taxes doesn't have to be stressful. Here's a streamlined checklist to get you started:

Personal Information:

  • Social Security/Tax ID numbers: Keep your, your spouse's, and dependents' numbers handy.
  • Last year's returns: These can refresh your memory and expedite online filing.
  • Bank account details: Ensure you have routing and account numbers for direct refund or payment.
  • IP PIN: If issued, grab this ID protection number for yourself and eligible dependents.

Income Documentation:

  • W-2 forms:You should have your W-2 around or shortly after January 31st. Employers are required to post and/or email W-2s by then.
  • 1099 forms: From January 31 through mid-February, look out for various 1099s detailing different income sources:
    • 1099-MISC:Miscellaneous income like winnings or rentals
    • 1099-NEC:Contract work
    • 1099-K: Payments via third-party platforms exceeding $20,000
    • 1099-INT:Interest income
    • 1099-DIV: Dividend income
    • 1099-B: Brokerage transactions

Remember, this is just a starting point. Your specific needs may require additional documents such as receipts, medical bills, etc.


What is Form 1099-R?

If you received a retirement plan distribution of $10 or more in the previous tax year, you'll receive Form 1099-R. This form is also sent if a loan from your retirement plan turns into a taxable distribution due to untimely payments or if you leave your job before repayment.

Form 1099-R assists the IRS in determining your taxable income for the previous year, listing both taxable and non-taxable distributions. Whether you owe taxes on these distributions depends on their type.

Your 1099-R will contain various details, such as the gross distribution amount, taxable income, federal and state withholdings, distribution type, and potential additional taxes or penalties. Understanding each box's contents can be challenging, but the IRS provides a comprehensive guide explaining the form's information and how to interpret it.


CONTACT US to speak with an experienced financial advisor today. We can help you plan for the future you want.