Smart Tax Prep Tips for a Smooth Filing Season
Tax season is here, and this year we wanted to share a few less-known tips to help you stay organized, protect your identity, and maximize your savings.
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Secure Your Identity with an IRS PIN
Your security is our top priority, so this is at the top of our list. To prevent tax-related identity theft, we highly recommend setting up an Identity Protection PIN (IP PIN) with the IRS. This six-digit number ensures that only you can file a return in your name, adding an extra layer of security against fraud. The fastest way to receive an IP PIN is to request one through your Online IRS Account.
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Contributions That Still Count (Even After the Year Ends!)
- If you're self-employed, SEP IRA and solo 401(k) contributions can be made until your tax filing deadline (including extensions).
- You can still contribute to an IRA for Tax Year 2024 until April 15, 2025, potentially lowering your taxable income. There are income limits around deductibility, so be advised these may come into play depending on your income.
- HSA Contributions – If you have a Health Savings Account (HSA), contributions made until April 15, 2025 can still count for 2024 and can reduce your taxable income. Make sure you contact your HSA trustee to ensure your contributions are credited to the correct tax year.
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Understanding 1099-R Rollovers
If you rolled over a 401(k) or IRA, don’t panic if the amount appears on your 1099-R as a distribution. Check Box 7—if you see Code G, it means the rollover is non-taxable, and you won’t owe taxes on that amount.
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Venmo, PayPal, and Cash App Transactions
The IRS is gradually lowering the threshold for third-party payment platforms like Venmo, PayPal, & other Cash Apps to issue 1099-Ks for business transactions. Personal Transactions such as gifts and reimbursements, are NOT taxable and will not be included. Here’s what you need to know:
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Taking a few extra steps now can help you file with confidence and potentially save money. If you have questions, please don’t hesitate to reach out to us or your tax professional. Happy filing!
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