As I was writing last week’s post, I realized that I really needed to tell you all about a few other end of the year tips and tricks to make sure that everyone’s favorite time of the year -- TAX TIME -- goes smoothly.
The worst thing is realizing when you are filing that you missed out on some money saving opportunities, but that there’s nothing you can do about it now. Let’s try to avoid that scenario together!
So, what can you do before the end of 2024?
Bookkeeping
Already have a bookkeeper? Check in with them! Ask them if they need any additional information or documentation from you before they close out your books for the year.
You are your own bookkeeper? Make sure your books are up to date and reconciled. This is the time to find those old receipts, upload them, and move on! If this is like pulling teeth for you, I recommend good ol’ bribery (i.e. telling myself that I’ll order my favorite Thai takeout tonight if I finish Q2 and Q3) or admitting that you might want to outsource this work for next year (reach out to me for recommendations!)
Own a business and have no idea what I’m talking about? Please reach out! I can help you create systems so you aren’t in a stressful tax situation in the future -- and so that 2023 taxes aren’t as stressful as they could be. A kind, knowledgeable, holding hand is pretty awesome.
Documentation & Mail
If you are a 1099 employee, make sure you know exactly who to expect 1099s from in early 2024 (i.e. anyone who paid you more than $600). I recommend making a list of the people/companies as well as the amounts you got paid so you can cross reference and check them off the list when the papers come in. That way it is also really easy to know who you need to follow up with early next year!
If you want to be really nice check in with these folks and make sure they don’t need a W9 form from you (you likely already filled one out for them, but sometimes these things get lost or forgotten about!)
If you are a W2 employee, check to find out if you’ll be getting your W2 in the mail or electronically. If it is electronically, make sure you know how to log into whatever portal the company uses so you aren’t dealing with last minute tech headaches!
Speaking of portals, no matter how you get paid, now is the time to figure out how to log into all your portals. That means any HR related portals as well as all bank accounts (especially savings accounts!), and investment accounts. Most tax docs go electronically now and it can be easy to miss things!
Spending Money!
If you own a business (LLC, s-corp, or sole proprietorship) this may be a good time to make some last minute tax deductible purchases. You might even be able to prepay for upcoming events or services you know you’ll be signing up for in the new year. The trick with these types of last minute purchases is that you need to buy things you actually need to buy! The tax deduction is rarely worth it to buy things you actually don’t want or need, but stocking up on disposables that you regularly use, nonperishable items, or equipment can be a great idea!
This is also a great time to check in on your charitable giving. If you itemize your deductions (i.e. you do not use the standard deduction when you file taxes), you may be able to deduct your charitable contributions! The rules on whether or not you can deduct and how much are dependent on other tax circumstances, so you should reach out to your CPA to find out exactly how those donations will impact your taxes, but either way you will be giving money to support a cause you believe in -- and that seems like a win to me!
And what can you do between January 1 and April 15, 2024?
Contribute to retirement! This could be an IRA, 401k, SEP, or 403b. As long as it is a pre-tax retirement account then you can deduct your contributions for the 2023 fiscal year. Most financial institutions (i.e. the companies that hold your retirement accounts) have an easy way for you to indicate that you want the contribution to be for the previous year, but if you don’t see it you can always call the company and ask for help.
As always, I’m rooting for you.
XOXO,
