Organizing your tax documents now can be helpful as you hit February. What were your 529 contributions, IRA contributions, Roth conversions, etc for the previous tax year? Your CPA’s Tax Organizer will ask for these, yet its good to start planning now to ensure a painless process as we enter Winter Family Vacation Season (hopefully!). Here are a few other tips for this tax season:
- WAIT TO FILE UNTIL APRIL 1 at the earliest. We can’t stress this enough. Tax forms get corrected often, sometimes as late as March 30 by ETF, Mutual Fund, and other companies. Filing in February will likely form you to re-file at an additional cost. The corrected forms only entail a number or two that needs to be changed on the return. Why risk it? This does not mean wait to prepare your return. It just means prepare your return in Feb/Mar with your CPA, then sign in April, if no corrections from the custodians have been received. Happy to answer any questions when we see you this Winter/Spring.
- Update and scan your home receipts. At some point in the future, you may sell your house. If you live in MA and bought your home 10+ years ago, there is a pretty good likelihood you have made some improvements that can be added to your original cost basis. And with supply so short in MA, there is probably a decent change you are approaching (or have surpassed) $500k in real estate appreciation. Why is $250k and $500k in appreciation so important? For singles, $250k is the capital gain amount that you can receive without any additional tax. It is $500k for married filing jointlys.
- Organize your charitable contributions. Invest in a scanner that can help keep you organized. Scan all your receipts to one folder and start organizing what you sent and to whom.
- Schedule a time in early March with your CPA. An appointment will hold you accountable to get organized. You don’t need everything, yet I am sure you can pull together at least 80% of the info that you will eventually need for your filing. And getting this date will slide you in right before the small business filing deadline of March 15.
