Today’s question is a great one. It’s pretty timely now that tax season is behind us. The question is: Now that you’ve filed your taxes, what can you do with that information to best prepare yourself for the year ahead?

Preparing your taxes is certainly daunting. Nobody wants to do it. Everyone thinks they pay too much in taxes. The good news is that once your taxes are filed, you have a lot of important information on that tax form that you can use to get in front of some tax issues you may have had in the past year.

Strategize and Maximize Your Benefits Post-Filing

Tax forms hold valuable information, and you should bring them to your financial planner and have a higher-level planning conversation for the year ahead. What I’m referring to includes exploring Roth conversion opportunities, strategizing quarterly taxes that may be due, or planning for required minimum distributions (RMDs).

Additionally, if you’re inclined to make charitable donations, it’s important to understand how to maximize your tax benefits. It’s equally important to leverage the available deductions to your advantage. This proactive approach ensures you’re making the most informed financial decisions moving forward.

So, after successfully finishing your tax filing, it’s a good idea to take your completed 1040 form and discuss it with your financial planner. This conversation should focus on reviewing your income for the past year, including dividends, interest from various accounts, pensions, Social Security, and RMDs. This will give you a comprehensive view of all your income sources.

Unlocking Opportunities for the 2024 Tax Year

You want to consider the upcoming year’s opportunities, particularly in terms of tax changes. Are tax rates shifting? Will tax brackets expand slightly? If that’s the case, there may be an opportunity to generate some extra income without moving yourself into a higher tax bracket.

That could be very useful for Roth conversion planning, which is something that we’re talking about with almost all of our clients. While it’s not necessarily the right choice for everyone, it’s a discussion worth having.

Turn Your 1040 into a Plan for Success

Again, now that you’ve filed your taxes and you have that 1040, bring it in. Discuss your situation and experiences from the 2023 tax year with your advisor, and work through a plan for 2024.

It’s very useful information and should be utilized to make sure that you’re putting yourself in the right position going forward.