Tax Tips 101

BY ANDREA BEREZNAk, CRPC®, CFP®

Tax season is upon us! As you prepare to file your 2022 tax return, here are a few tips to help ensure a positive experience.

Gather your Tax-Related Documents

Much of the work in preparing your tax return is locating and compiling the needed records and documents. Remember to wait until you receive all of your 2022 tax documents before you file your tax return. These include all income like W-2s, as well as all interest, dividends, capital gains, and retirement account distributions, which are usually reported on 1099 forms sent by the firms where your accounts are held.

If you haven’t done this in the past, make a designated folder or container for all tax-related documents for this coming year. This can be electronic or a physical file folder or shoe box. What is important is having a place to store all relevant documents as they come in, so you have them together and ready to go come tax time.

Make IRA, Roth IRA or H.S.A. 2022 Contributions

The IRS permits 2022 contributions to IRAs, Roth IRAs, and H.S.A. accounts up until the tax filing deadline. For 2022 that is April 18th, 2023. These can be excellent ways to save for retirement or medical expenses if you qualify to contribute to them. H.S.A. and traditional IRA contributions reduce your taxable income, which can help if you are in a high tax bracket for 2022. Roth IRA contributions don’t lower your tax liability in the year you deposit funds, but they grow tax-free and when you use those funds for retirement after age 59 ½, all of the growth and earnings from the account are tax-free as well!

Consider Changes to Prepare you for Next Year

Right after you file your 2022 return is the best time to consider if you need to make any changes in advance of your 2023 tax return.

Paycheck Withholding

· Adjust your paycheck tax withholding if needed. If you paid out of pocket in taxes, you may want to have your employer withhold more. Likewise if your refund was large and you want to keep those funds in your pocket, consider lowering your withholding.

New Tax Credits

· Review tax credits that you may be eligible for. There are several new tax credits included in the recently passed Secure Act 2.0 that you might be able to take advantage of related to buying an electric vehicle or making energy efficiency improvements in your home.

Retirement & Benefit Savings

· Are you taking full advantage of your tax-advantaged savings opportunities? Based on your eligibility and tax situation from 2022, consider setting up automatic contributions to your H.S.A., Roth IRA, IRA, and/or workplace retirement plan accounts. Two significant benefits of this approach are that you’ll feel less impact of the savings on your bank account when they are spaced throughout the year, and investors who automate their savings tend to save more over time.

Though taxes are on our mind during this time of year, tax-planning is a year-round activity. Smart planning and use of tax strategies can help optimize how much of your money you keep for your financial goals.

Let us know how you have simplified your taxes, and what goals you are working on. If you have questions or doubts, we can help. Call us at (480) 507-2425 or contact us online. We’d love to meet you.

The content in this article was prepared by the article’s author. Cetera Advisor Networks, LLC does not endorse its content, and the views expressed may not necessarily reflect those held by Cetera Advisor Networks, LLC.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice