Tax season - organization is king!
The changing calendar means new opportunities for the future and the arrival of the tax season. One we generally look forward to, the other, not so much. Tax season can bring stress many would rather avoid. That is a one-way ticket to jail, so that’s an ill-advised plan. One way to reduce stress is to know what you need and when you should expect it.
I don’t know about you, but my taxes are a little more complicated than they were when I was 25. I don’t require a team of tax professionals, but I have more documents today than I did many years ago. And those documents don’t always arrive at the same time. How can we manage it and get our taxes filed on time, if not early? Organization!
The first part of organization is knowing what documents are needed to file a complete tax return.
Proof of income – W-2, 1099
Gambling winnings – W-2G
Mortgage interest statement – Form 1098
Health insurance marketplace statement – Form 1095
HSA distributions – Form 1099-SA
Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. – Form 1099-R
IRA contribution – Form 5498
Dividends and distributions (domestic corporations and qualified foreign corporations– Form 1099-DIV
Interest income statement – Form 1099-INT
Social security benefits – SSA 1099
Distribution from a qualified education program – 1099-Q
Student loan interest statement – 1098-E
Identification – social security card or ITIN, and photo identification
Charitable giving statements – non-profit contributions, churches
The second part of getting organized for the tax season is knowing when documents are expected to be received and filed. The IRS is expected to start accepting 2024 federal tax returns between January 15 and 31, 2025. Individual taxpayers should be aware of some important 2025 deadlines. IRS 2025 publications 505 and 509 line out the tax calendar and due dates helpful to taxpayers.
Dates below are relevant if 1) you do not have taxes withheld from your paycheck, or not enough was withheld, 2) part of your compensation is derived from tips that aren’t otherwise reported, and 3) tax filers need quick reminders of filing deadlines.
For consistency, employees must report tips over $20 to their employers by the 10th day of the following month. For example, if tips were received from April 3 – 23, those tips should be reported by May 10.
2025 tax dates and deadlines
Filing annual taxes can be less stressful when we know the necessary documentation and applicable deadlines. No need to cost ourselves unnecessary taxes and penalties because of lack of preparation.
The 50% uncomfortable, 70% incremental, 100% vital principle, taxpayer version is in effect. What documents do you need to plan for and what services should you research to ensure you have the appropriate provider and software? This happens once each year, let’s be ready. If you want to talk about it, drop us a note at letstalk@studiomfinancial.net. Until we meet…keep working on the change.