Tax season is open! 5 steps to get started on your tax return

We’re just getting into the swing of 2024, and one way to kick the year off right is getting prepared to file your 2023 tax return. We’re all going to have to file our taxes by April 15th, and giving yourself a head start can help.

If you’re expecting a tax refund this year, filing your return sooner will give you access to your money faster. Here are five ways to prepare for your tax return now, so you can file quickly and confidently. 

1. Organize your documents

For many, tracking down the paperwork needed to file a tax return is the hardest part. You can get ahead by pulling together any tax forms and paperwork you know you’ll need going into tax season. Some common tax paperwork includes:

• W-2 - This is the tax form you’ll receive from your employer detailing your 2023 income and how much you paid in taxes.
• 1099 - There are many different types of 1099s. Freelancers may receive 1099-NECs or 1099-Ks totalling their earnings for the year. Those receiving Social Security will receive SSA-1099. You may also receive a 1099-INT for any interest you earned on your savings accounts.
• Business receipts - If you worked for yourself in 2023, compile your expenses now so you have an easier time with deductions.

If you haven’t received any tax paperwork yet, don’t worry. You should start receiving tax forms from your employers this month. Many tax forms must be postmarked/sent to you by January 31, 2023. You may also be able to pull up a digital copy through your employer.

2. Consider any changes you made in 2023

Did anything significant happen last year that might impact your tax filing? Maybe you moved to another state, got married, or got divorced. All of these situations can spell changes for your tax return. 

If you moved in 2023, you’ll want to make sure the IRS and SSA office have your new address so you receive any timely correspondence. If you moved to a new state, you might owe more in state taxes, depending on your new state’s tax code. Make sure you brush up on those differences now, so you’re not surprised when you’re ready to file.

If you got married, divorced, or lost a spouse in 2023, this could impact your filing status. You can use the IRS’s Filing Status tool to determine the right filing status for your household.

3. If you earn freelance income, check your estimated tax payments

Since freelancers do not have taxes automatically withheld from their earnings, they must pay estimated taxes four times a year to the IRS. If you earned any type of self-employment income last year, double check your estimated tax payments to ensure you’ve paid the federal government what you owe.

If you pay too little, you might incur an underpayment penalty for each quarter you’ve underpaid. The sooner you catch up on your tax bill the better. If you’re worried about affording your tax bill, consider enrolling in an IRS payment plan. This is typically the most affordable way to catch up on your tax bill.

4. Check in on your IRA contributions

If you have an IRA, you can still make contributions for the 2023 tax year until April 15, 2024. If you haven’t maxed out your IRA for 2023 and can afford to contribute more, there’s still time. For 2023, the IRA contribution limit is $6,500. If you’re 50 or older, it’s $7,500. 

5. Get a jumpstart on next year’s tax return

Once you’ve prepared for your 2023 taxes, you can get ahead on next year’s tax return. If you’re facing a surprise tax bill this year, revisit your W-4 withholding form from your employer and adjust your withholding amounts to ensure you’re paying enough taxes throughout the year. 

If you’re self-employed, prepare for your first quarterly estimated tax payment for the 2024 tax year (due on April 15, 2024). 

The bottom line

Don’t wait until the last minute to file your taxes. Acting quickly can help you get your tax refund faster and save you from unnecessary stress. Gather your important documents now and begin filling out your 2023 tax return. This year, Current has partnered with Column Tax to offer tax filing. Begin filing taxes with Current today.

Current is in partnership with Column Tax for tax filing services.  Current does not provide tax, legal, or accounting advice, and users should consult a qualified professional for personalized guidance. View Column Tax Terms of Use here: https://www.columntax.com/terms-of-use.