We have a very timely conversation today as tax season is upon us once again and getting organized is top of mind. Either you’re really happy with yourself because you already got your tax return done and filed and don’t have to worry about it anymore, or you’re still collecting documents and just worrying about it in general. Even if you’re getting a tax refund, you might still worry about doing taxes. It’s just not a fun process for most people. So we wanted to talk with Heath Grossman, CFP®, about what you can be doing to make this tax season as smooth as possible for yourself.

The first thing to be mindful of is tax deadlines. While the main deadline is typically April 15th, some may need to file for an extension. It’s crucial to remember that even if you’re granted an extension, taxes owed are still due by the original deadline. This is why having an organized filing system, both for paper and digital documents, is essential. It can prevent the oversight of critical forms like 1099s and W2s, which may now be delivered electronically and risk being overlooked or lost in a cluttered inbox.

Life events such as marriage, divorce, retirement, or the sale of property can significantly impact your tax situation. Reflecting on what has changed since the last tax filing can provide a clearer picture and prevent potential issues. You should also be aware of tax season scams as you’re prepping. The IRS will not contact you via email, text, or phone asking for gift cards or sensitive information. Awareness and vigilance during this time can save a lot of trouble.

It’s also important to know the difference between tax preparation and tax planning. The former involves the process of compiling and filing your taxes for the previous year, while the latter is a strategic approach to managing your tax burden for the future. One strategy he suggests is maximizing contributions to tax-advantaged retirement accounts, which can lower taxable income and result in tax savings.

Planning for retirement involves assessing your future financial needs and adjusting your current savings strategy to meet those goals. It can also lead to tax benefits if managed correctly. That’s why we often encourage people to start thinking about their contributions for the upcoming year, especially if there have been changes to their income.

Navigating tax season requires organization, attention to detail, and a proactive approach to planning. By working with a financial team like Johnson Brunetti, taxpayers can not only survive but thrive during this period, potentially saving money and securing a better financial future.

Here’s some of what we discuss in this episode:

• What’s the easiest way to start getting last year’s tax return together?

• Start thinking about what has changed from last year to this year.

• How does tax planning differ from tax preparation?

• What kind of things are you doing during the tax planning process?