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Get ready for tax season: Tips for individuals and small business owners
Get ready for tax season: Tips for individuals and small business owners
As the tax season approaches, now is the time to start organizing your information in preparation for filing your returns. A little organization and planning now can save you stress and money later. Whether you’re filing your personal taxes or have a small business as well, these tips will help you confidently navigate this year’s tax season.
Mark Your Calendar and Start Early
One of the best ways to minimize tax season stress is to start early. The IRS typically begins accepting returns in late January, and filing deadlines for 2025 include:
- April 15 for most personal filers
- March 17 for partnerships and S Corporations
By beginning early, you can avoid last-minute mistakes and ensure you’ve gathered all the necessary documents, including W-2s, 1099s, and receipts for deductible expenses.
Filing Extensions Past April 15
If you cannot file your tax return by April 15, you can request an extension from the IRS. Filing Form 4868 grants you an additional six months, moving your deadline to October 15. However, it’s important to note that this extension applies only to filing, not payments. To avoid penalties and interest, ensure you pay any estimated taxes owed by the original April deadline.
Life Changes? Update Your Tax Plan
Major life events often come with tax implications. Whether you got married, had a child, started a new job, or experienced another significant change, revisit your tax strategy. These events may affect your filing status and make you eligible for new credits or deductions.
Key Deductions and Credits for Individual Filers
Be mindful of:
- Student Loan Interest Deduction: You may deduct up to $2,500 in interest paid on qualified student loans
- Child Tax Credit (CTC): A tax benefit for parents or guardians of children under 17
- Homeowner Deductions: Mortgage interest, property taxes, and certain home improvements may be deductible
Additionally, ensure that you account for changes in tax brackets and other updates to federal and state tax laws (Tax Year 2024 brackets for the IRS here). For guidance, consult reliable resources like the IRS website or trusted financial advisors.
Tips for Small Business Owners
Owning a business adds complexity to tax preparation but also opens the door to valuable deductions. Key areas to focus on include:
- Business Expenses: Track and deduct expenses related to business operations, such as office supplies, software, travel, and meals
- Home Office Deduction: If you work from home, you may qualify for this deduction, provided your workspace meets IRS criteria
- Self-Employment Taxes: Remember that you’re responsible for Social Security and Medicare taxes, which may be offset by deductions like the Qualified Business Income (QBI) deduction
Staying organized and consulting a tax professional can help ensure you don’t miss opportunities to reduce your taxable income.
Stay Organized Year-Round
Effective tax preparation starts long before filing season. Keep your financial records organized throughout the year. Consider:
- Using digital tools or apps to track expenses and store receipts.
- Creating separate folders for income statements, deductible expenses, and other tax-related documents.
- Reviewing your records monthly to ensure everything is up to date.
Good organization simplifies tax filing and can help you maximize deductions and avoid penalties for missing deadlines.
Bottom line
Start early, stay organized, and take advantage of every opportunity to save. With the right preparation, you will have an uneventful tax season. And should you receive a refund, there is no better way to celebrate than by watching it grow. Earn interest on your refund with a new savings account.
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Wintrust and its affiliates do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
