Here are 3 moves to make before the 2023 tax filing season opens

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Take steps to reduce your 2022 tax bill

For example, the fourth-quarter estimated tax payment for 2022 is due on Jan. 17, which may reduce your tax bill or minimize late payment penalties.

You can also still make individual retirement account contributions until the tax-filing deadline on April 18, 2023, said Brown, who is also a CPA. While Roth IRA deposits won’t provide a deduction, you may get a tax break with pretax IRA contributions, depending on your income and participation in a workplace retirement plan.

You may also score a 2022 deduction by making a health savings account contribution by the tax deadline, assuming you’re enrolled in an eligible health insurance plan. 

Get organized with a tax forms checklist

Ajay Kaisth, a CFP and principal at KAI Advisors in Princeton Junction, New Jersey, says it’s time to get organized with the tax forms needed for your 2022 return. 

“If you have not already done so, review last year’s records and create a checklist of the forms” you’re expecting, he suggested. Common forms may include a W-2 from your job and 1099-NEC forms for contract work, 1099-G for unemployment income, among others. 

With a brokerage account, you may also receive 1099-B for capital gains and losses and 1099-DIV for dividends and distributions. For deductions, you may have 1098 for mortgage interest, 5498 for individual retirement account deposits, 5498-SA for health savings account contributions and more.

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You should wait to file until you have copies of every form you need. Known as “information returns,” a copy of these forms is sent to the IRS and the taxpayer every year. If your tax return doesn’t match the forms, the IRS system may send an automated notice, which may take time to resolve. 

“If you aren’t sure whether something is important for tax purposes, it is better to retain the documentation,” Kaisth added.

Source: https://www.cnbc.com/2023/01/11/what-to-know-before-the-2023-tax-filing-season-opens.html