Photo of Eric R. Ebbert, CFP®, MBA, CEO Eric R. Ebbert, CFP®, MBA, CEO Oct 24, 2020

The end of the tax season is right around the corner. Many people are thinking about how to prepare to make sure they do not incur any penalties and are looking for ways to get the most tax advantages possible.

Preparing for the end of tax season should not be a last-minute scramble you make around the tax filing deadline. There are some steps you should follow in the weeks or months leading up to the end of tax season, so you are better prepared to file correctly and get the most out of your tax advantages.

Seven steps to prepare for the end of tax season

  1. Decide how you want to file — You have the option for filing your taxes yourself, but many people avoid this because filing taxes can be a complicated process. Any mistakes in filing could come back to haunt you in the form of a penalty. Instead, you could file through a professional tax preparer.

    Review your options and decide what is best for you.
  2. Collect all important documents — Collect all your tax documents, payment information (W2s, 1099-MISC, etc.), bank statements, brokerage statements, investment information and any other finance-related information you will need for your taxes.
  3. Gather up your receipts — Gather all your receipts for expenses you wish to claim as a deduction. This includes receipts for any charitable contributions you have made during the tax year.
  4. Max out retirement contributions — If you have not maxed out your 401(k) or traditional IRA conversions, and you can afford to, now is the time to do it. Maxing out your contributions helps you in the long run for saving for retirement, but it also helps lower your tax liability for the current year.
  5. Double-check beneficiary designations — This is a great time of the year to make sure your designations are lined up and to make any necessary changes. Organizing your beneficiary designations can help minimize taxes that your beneficiaries pay on your assets after you pass away.
  6. Take your required minimum distributions (RMDs) — If you have not withdrawn your RMD from a 401(k) or IRA account, make sure you do it by December 31 or the IRS will penalize you for 50% of the RMD amount.
  7. Plan ahead for a refund — If you are expecting a refund for your tax payments instead of owing money, then you should make a plan for what to do with your refund. You can apply all or some of your refund to next year’s taxes. You can use it as supplemental income. You can contribute it to your retirement accounts and savings accounts. You can use it to purchase U.S. savings bonds.

    Think about what will suit you best, and make a plan for using your refund to finance it.

Talk to a ProVise CFP® professional about preparing for the end of tax season

Paying taxes is a complicated process that is overwhelming for many people. Thankfully, you can get help from financial experts you can trust, like our CERTIFIED FINANCIAL PLANNER™ professionals at ProVise Management Group.

Our team can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about planning for the end of tax season? Contact ProVise today to schedule a complimentary consultation.