How Do I Prepare for Tax Season?

Posted February 9, 2024

Q: Help—tax season is coming! How do I best prepare?

A: It’s great that you’ve started getting ready for tax season way before the deadline, but it sure can be overwhelming. No worries, though; we can help! Here’s how to prepare for tax season.

Gather Your Documents

The first step in prepping for tax season is to gather all the necessary documents. Depending on your personal circumstances, these can include:

• W-2 forms
• 1099 forms
• Receipts and invoices
• Mortgage and loan documents
• Investment statements
• Business income and expenses
• Other miscellaneous income

Organize Your Finances

Store all your documents and receipts in a folder, binder, or digital file so you can access them whenever necessary. This will help ensure you don’t miss any deductible expenses.

Don't forget that your Bay Federal tax forms have already been mailed to you (if you are signed up for paper statements), and they are available through eStatements in BayFedOnline and the BayFed Mobile app.

Prepare Your Personal Information

In addition to your income information, you’ll need the Social Security number and date of birth of each dependent you claim. It’s a good idea to have this info, and any other details your tax preparer will need, ready before you start your return. 

Review Tax Law Changes

The tax code changes every year, and some of this year’s modifications may impact your tax situation. Be sure to review the most recent federal and state updates so you can take advantage of any new deductions or credits. 

Determine Your Filing Status

Your filing status determines the tax rates and the standard deduction you’re eligible to take. Choose the status that best fits your situation. The most common filing statuses are:

• Single
• Married filing jointly
• Married filing separately
• Head of household
• Qualifying widow(er)

Learn the Deadlines

It’s important to be aware of tax filing deadlines. For most individuals, the deadline to file federal income taxes is April 15.

Choose Your Filing Method

You can file a paper tax return and mail it to the IRS, use tax prep software like TurboTax or H&R Block, hire a professional tax preparer, or e-file your return on your own. You can learn more about ways to file your taxes at the Federal Trade Commision website and the California Franchise Tax Board website.

Plan for Next Year

Finally, use this tax season as an opportunity to plan for the future. Consider adjusting your tax withholding to avoid owing large sums at tax time or receiving large refunds. 

Categories: FinancialAdvice