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Learn How to Avoid These 6 Common Tax Errors

Knowing how you need to file your taxes depends on your income and filing status, as well as which deductions and credits you can claim. In this free ebook, we share some common errors to avoid.

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Welcome to Tax Season!!

January 18, 2023

Are you ready for the upcoming tax season? Hard to believe that another tax season is already here and seems like we just finished our last one. Some just recently filed by the October due date, many of you are done by April 15.

We that live in this tax world have many deadlines throughout the year. What some call the first tax season is the one that typically runs through April 15.

Even within that, there are other deadlines especially if you are a business owner.   If you have employees or hire independent contractors to work for you, you are responsible to make sure that you issue Forms W2 and 1099NEC by January 31.

If you own an S Corporation or in a partnership, you have a March 15 deadline to file or extend your company returns.

After the first tax season deadline (April 15 federal and April 20 for State of Hawaii) then there is second tax season.

That’s for those who filed extensions on time by March 15 or April 15, then you have deadlines of September 15 or October 15.

Enough with the deadlines, what can you do now to get ready?  As written in previous articles how well you document your finances and tax deductions is a key issue in how much you might be able to reduce your tax liability.

Now that the year is over can you still get any more tax deductions for 2022?

Yes and no.  Generally speaking your last chance to get a tax deduction ended on December 31 for last year, now the main focus is on gathering and documenting your income and legitimate tax deductions.

However – not all hope is lost for 2022 deductions.   You could make a contribution to an IRA by April 15 and if you are a business owner or self-employed you have even more opportunities.

You could establish a SEP IRA, possibly a 401K plan and take advantage of the profit sharing part of the plan even after year end.

This is where tax planning is merged with financial planning and why I am such a big believer that both should be done together. 

If all that your tax preparer does is do your tax return and all your financial planner does is sell you an IRA plan, you are missing out on opportunities to grow wealth by lowering your tax bill.

If you are a small business owner or self-employed (SBSE) or just have ben putting off setting up an IRA and would like to take advantage of these deductions use the link at the bottom to set up an initial call.

Even if you do your own tax return as a SBSE, you might still benefit from advice and actual plan setup.  

Other key items to prepare for the 2022 return is think back on life changes that happened during 2022 and possible tax effects.   Pull out your 2021 tax return and look through it top to bottom.  If the events on that return were repeated in 2022 then odds are high that you will need the same documents for this years tax return.

If you are one of our tax clients we have some worksheets for you to help you identify and capture deductions. You should already have received that but if not reach out and let me know.

If you started a new business and haven’t yet started on your bookkeeping you are behind and really need to get a start on that if you want to file a proper tax return and capture as many deductions as you can.

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