6 Tips to Help You Plan for Next Tax Season Now

Believe it or not, what you do now throughout 2024 can make a difference in your tax refund when you file your taxes in 2025. While we don’t expect you will cannonball into tax planning this second, below are six tips to help you get your tax feet wet for next season and ensure you get your biggest tax refund yet next year.

Tips for Tax Year 2024:

Stay Organized. Make it easy on yourself for next year and stay organized. Start a folder of important documents and financial records, which will help give you a jump-start come tax time next year. If you are self-employed you can use QuickBooks Self-Employed to easily track your income, mileage, expenses, and capture your receipts for the entire year. 

Consider reviewing your W-4 form to adjust your withholding. If you owed money when you filed your tax return, you may want to think about adjusting your withholding. Withholding is the tax your employer takes from your paycheck each pay period. Because personal and dependent exemptions were eliminated under tax reform, Form W-4 no longer uses personal withholding allowances to determine your withholding. The updated W-4 focuses on income from multiple jobs, spouse’s income, Child Tax Credits for your kids, Other Dependent Credit for other dependents, and any additional adjustments you may be eligible for. For some tax filers, it may only be necessary to fill out the personal information and sign the document. To update your withholding, simply re-file your W-4 form with your payroll department. You can choose to update it whenever you want throughout the year or as your personal situation changes. TurboTax has a W-4 calculator to help you adjust your W-4 based upon your personal circumstances.  You can use the tax calculator and then print out the form to give to your employer.  Your employer will be able to make the changes based upon your latest W-4 form and will adjust your paycheck withholding accordingly.

Make charitable donations before the end of the year. Contributing to charity or donating goods can reduce your taxes when you file  next year. When deciding where to donate to, if you can itemize your deductions and you would like to get a tax deduction, you’ll want to narrow your search to charities that are considered not for profit 501(c)(3) charitable organizations. You can check to see if your charitable organization of choice is listed as an IRS qualified exempt organization. To keep track and value your charitable giving or donated items throughout the year, use TurboTax Its Deductible. The app will help accurately value and track your donations and easily import the relevant information into TurboTax when it is time to file.

Lower taxable income by contributing to your retirement funds. Reduce your potential tax burden for next year by starting to plan for your future retirement. If you contribute to a 401(K) or a Traditional IRA, you will be able to take a dollar for dollar reduction in your income for your taxes. In 2024, you may contribute up to $23,000 ($30,500 if you’re age 50 or older) to your 401K and $7,000 ($8,000 if you’re age 50 and older) to your traditional IRA. If you are self-employed you can contribute the lesser of: 25% of your income or $69,000 to a SEP IRA.

Learn something new: Maybe you want to learn a new career skill, update your skills in your current career, or study a subject that has always interested you. No matter the motivation, if your income is moderate, you may be eligible for the Lifetime Learning Credit. There is no limit on the number of years you can claim the credit and it is worth up to $2,000 per tax return. You don’t need to be on track for a degree to claim this credit, the Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution.

Go solar and energy efficient: Under the Inflation Reduction Act signed into law in August 2022, solar energy credit increased from 26% of your purchase to 30% if you purchased residential energy efficiency property like solar panels and solar water heaters between January 1, 2022 through December 31, 2032. There are also credits for electric vehicles  under the Clean Vehicle Credit. 

If you still need to file your taxes, don’t worry about knowing tax laws and tax forms. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.