How To Prep for Filing Taxes in 2024

1. Annual contributions. As a financial advisor, this is the first thing I encourage people to think about. Have you maxed out contributions on your retirement accounts for the year? On top of growing your wealth for retirement, you also want to take care of those tax-free contributions. Whether it's your employee-sponsored 401(k) or your IRA, you want to be all caught up before the year ends. While you're at it, think about any other investments you've made that might allow you to lower your taxable income for 2023.

2. Consider your filing status. This is something that people don't think about until they're already filing, but it's really helpful to do ahead of time. The standard deduction for a single person is $13,850, and $27,700 for a married couple filing jointly. In the race to get your returns finished before April, that standard deduction might look extra appealing and keep you from tallying up all your potential write-offs. If you start thinking about it before it's time to file, you might discover that you, or you and your spouse, have lots of and lots of worthy deductions that could save you more than the standard deduction. Think about all those little things—the business meals, the home office, the cell phone and internet bills—that you could classify as business expenses. They probably add up to more than you expect, and you could end up getting a good chunk of money back on your return if you itemize all of it.

3. Look at your medical expenses. Here is another deductible expense that people often overlook. You can't write off every doctor's visit, but you can deduct medical and dental expenses that exceed 7.5% of your adjusted gross income. If you had a big surgery or a lot of hospital visits with co-pays, you might be able to knock a few thousand dollars off your tax bill. It'll be a lot easier to itemize those expenses if you start now, especially if you end up back in the doctor's office in January and lose track of which visits happened when.