With all of the tax work finally finished for the year- whether that was the original spring deadline or just recently completed in mid-October- individuals, businesses, and tax preparers may be tempted to take a big exhale and take a break from thinking about taxes until the new year. However, there can be significant benefits to taking a little time to prepare for tax season in the fall to make 2024 a smoother tax season.
One benefit of starting early is that the common last-minute stress can be avoided. Fall planning helps you avoid the stress and rush associated with last-minute tax preparation by giving you ample time to gather necessary documents, complete forms accurately, and address any potential issues or questions. This can lead to a smoother and less stressful tax season.
Another benefit is the ability to have more time to plan ahead optimize your tax liability, and review financial and investment strategies. When you prepare for tax season early, you can identify potential deductions, tax credits, and other strategies that will help to minimize your tax burden. For example, you can contribute to retirement accounts, make charitable donations, or engage in tax-loss harvesting (timely selling of securities at a loss to offset the amount of capital gains tax owed) before the end of the year to reduce your tax bill. Fall planning can also serve as an opportunity to review your overall financial and investment strategies. You can assess your portfolio, make necessary adjustments, and align your investments with your long-term financial goals and your short-term 2024 tax goals. Additionally, you have ample time to review the new tax laws and regulations and adjust your strategies accordingly, not to be surprised at the beginning of the year.
Incorporating these strategies into your fall tax planning can help you save money, reduce stress, and make informed financial decisions. As always, it is important to consult with a tax professional or financial advisor to ensure you’re taking full advantage of the available opportunities and staying compliant with tax regulations.
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