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 are significant benefits to taking a little bit of time to devote to tax planning in the fall in order 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 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 and optimize your tax liability and review financial and investment strategies. 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 in place and adjust your strategies accordingly in order to not be surprised at the beginning of the year.
It is important to start preparing for the upcoming 1099-NECs. This fall, you can start by filling out W-9 forms for anyone you’ve paid $600 or more for their work as a non-employee. By doing this, you’ll have all the information you need when it’s time to send out those 1099-NEC forms, and you’ll be set by the January 31st deadline.
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.
For more information, call 417.380.5000 or email transportation@abacus.cpa.
