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Prepare Your Taxes Before the Beginning of the New Year

Last updated: 17 Oct, 2023 By Ashish Rana | 6 Minutes Read

The IRS has stated that the tax season starts off on January 19, 2016. To be certain, taxes preparation is usually the very last thing on the mind. So, whenever you are attempting to make it through the vacation shopping frenzy, you will face challenges.

However, if you take a dash of time now—and make use of the cost-free applications that tax preparation software companies provide online as well as through mobile—you’ll get hold of a far better notion of what you may obtain or perhaps are obligated to pay on your taxes in the coming year.

That might be a huge benefit with regards to filing your tax return come the opening bell. Fast filers enjoy a head start when it comes down to obtaining tax refunds as well. Yours may possibly turn up as soon as you’re needing to fork out those vacation credit card expenses.

This is where tax preparation outsourcing company can help you. They use the latest tax software such as TurboTax and H&R Block, helping you to know the paying amount.

Steps to take to Increase your Tax Refunds

Maximize Itemized Deductions:

Philanthropic Donations: Consider increasing your charitable donations to maximize itemized deductions.
Business Expenses: Keep track of all eligible business expenses and ensure they are properly documented for deduction purposes.
Eligible Healthcare Expenditures: If your healthcare expenditures meet the minimum threshold for deductions (10% of household realigned gross earnings or 7.5% of AGI for those 65 or older), ensure you include these expenses in your itemized deductions.

2. Modify Withholding for December:

Use the IRS’s withholding calculator to adjust your withholding for the final week of December to optimize your tax situation.

3. Sell Assets to Draw Deficits:

Consider selling assets to create capital losses, which can be deducted, with a limit of up to $3,000 in losses that can be carried over to future years.

4. Prepay 2016 Real Estate Taxes:

Prepay any outstanding 2016 real estate taxes in January before year-end, unless you anticipate being subject to the Alternative Minimum Tax (AMT). AMT considerations may impact the benefits of this move.

5. Consult a Tax Preparation Outsourcing Company:

If you believe you may be subject to the Alternative Minimum Tax (AMT), seek advice from a tax preparation outsourcing company before making any financial moves to optimize your tax situation.

6. Utilize Tax-Saving Strategies for Essential Minimum Distributions:

To reduce the impact of essential minimum distributions from pension accounts, consider donating a portion or all of that money for additional tax savings. This strategy, which was previously temporary, is now permanent due to recent legislation.

Also Read: How Outsourcing Tax Preparation can save you Money this Tax Seasons?

Choose Cogneesol: Your Tax Preparation Partner

Tax preparation can be a headache for everyone. Let the professionals handle it their own way. We at Cogneesol can help you prepare taxes using Lacerte Tax Preparation, ProSeries Tax Preparation, UltraTax Tax Preparation and several other tax applications.