Tax season officially starts this week with the IRS opening e-File for individual taxpayers. While many people are getting a jump on filing their taxes, you may want to wait a little bit and get organized before you decide to do your tax return.
When the Tax Cuts and Jobs Act (TJCA) was signed into law in 2017, the standard deduction for individual taxpayers was nearly doubled regardless of tax filing status. This move alone went a long way to simplifying our tax code, mostly because it dramatically reduced the number of Americans who needed to itemize deductions on their tax returns.
Still, the U.S. tax code changes all the time, and there are an endless number of mistakes to avoid and details to keep track of.
I reached out to a range of CPAs and tax experts to get their best tips for filing taxes in 2024 for the 2023 tax year, and here’s what they said.
1. Keep Track of Tax Documents As They Arrive
You may not have all the documentation you need to file a tax return for several more weeks. Ultimately, CPA Jason K. Moll says this is why you should go out of your way to keep track of all your tax documents as they are sent to you. If you begin storing documents in different places, you are more likely to lose them or forget about some of them altogether.
Moll also points out that tax documents can be delivered online, via email, or through the mail, and you can do yourself a favor by setting up a cloud-based folder to keep all your digital documents in. Meanwhile, you can keep paper documents sent to you in the mail in a regular folder or a dedicated slot in your filing cabinet.
“That way you know exactly where they are when it comes time to file,” he said.
2. Have All Required Documents Before You Get Started
According to CPA Scott Rawitscher of Collaborative Business Solutions , one of the biggest issues that slows down the tax preparation process is going back and forth with a CPA or tax preparer to ensure all the information is collected. With that in mind, you should make sure the person preparing your taxes has every form you need before you get started and not after.
“If your CPA provides you with a tax organizer, definitely use it as a guide,” he said. And if you’re unclear on anything you might need, reach out to your tax preparer early on in the process to find out what you need and how to get it.
3. Don’t Forget to Report Earned Interest
CPA JP Geisbauer of Centerpoint Financial Management points out that rising interest rates in 2023 led to many taxpayers opening new savings accounts or certificates of deposit (CDs) to earn more interest on their cash reserves. However, not everyone knows that interest earned in these accounts needs to be reported as taxable income.
“Inventory all your interest-bearing cash accounts, and ensure you have included the information in your income tax return,” said Geisbauer. “The last thing you want to do is file a tax return only to receive a notice that you should have included interest income from an account you may have forgotten about.”
4. File Electronically
CPA Lisa Greene-Lewis of TurboTax points out that filing taxes electronically and early on can help you get your tax refund significantly faster. The IRS even points out that 9 out of 10 electronically filed returns lead to receiving a tax refund in 21 days or less.
Fortunately, you can e-file taxes on your own if you prefer, but you can also file electronically with any of the best tax preparation software programs.
5. Get Professional Help
Greene-Lewis also says that, if you feel overwhelmed with the prospect of filing your own taxes , you can always reach out to a professional for help or use a tax software program to make the process easier.
Whether you want to do it yourself, get help along the way, or have a tax expert do your taxes for you, she points out that TurboTax offers a suite of full-service, assisted, and DIY tax preparation offerings for individuals, families, and small businesses.
“Enabled through Intuit’s generative AI-powered innovations paired with the company’s virtual expert platform, filers can choose to file their taxes themself, with assistance along the way, or fully hand off their taxes for a virtual or in-person tax preparation experience and receive the same maximum refund and accuracy,” she said.
6. Take Major Life Changes Into Account
CPA Dana Lashbaugh of Helium Financial Group also says that, whether you’re filing taxes yourself or with the help of a professional, you have to take major changes in your life into account and communicate them properly.
This should also include any changes to your life, such as getting married, having a new child, enrollment into college, retirement plans, change of employment, buying or selling a business, or even buying or selling a home.
“All of these things impact your taxes, and working with your tax person early on can help avoid some unintended tax consequences,” said Lashbaugh.
7. Remember that Filing Late Doesn’t Mean You Can Pay Late
Lashbaugh also points out the common misconception that requesting an extension for tax filing means you can pay the amount you owe later in the year, too. However, this is not the case at all, and taxes due are always due by the tax filing deadline each year. For 2024, this date falls on April 15th.
“When filing an extension, the taxes are still due on April 15th, but filing can be delayed until October 15th,” he noted.
8. Keep Tabs On All the Deductions and Credits You’re Eligible For
Also consider making a list of all the deductions and credits you may be eligible for this year, which you can base off of deductions and credits you were able to take in previous years and changes that occurred in your life and finances in 2023.
Tax attorney Priya Mishra said that taking advantage of deductions can reduce the amount of your income that is taxed, whereas tax credits reduce your taxes owed directly.
Mishra adds that deductions and credits to watch out for can include deductions for charitable contributions and business, the Earned Income Tax Credit (EITC), and the Child Tax Credit (CTC).
If you had large medical or dental bills in tax year 2023, you might be able to claim this deduction, she said, provided eligible medical expenses were above 7.5% of your adjusted gross income (AGI).