3 Moves to Make Now to Prepare for the 2023 Tax Filing Season, According to an Advisor

As tax season approaches, experts say there are some key things to keep in mind. The IRS will begin accepting individual tax returns soon, so it's important to be prepared. Here are a few things to keep in mind to make sure you're ready for tax season.

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The tax-filing season for businesses will begin on January 12, but the IRS has not yet announced the opening date for individual filers. Last year, the tax-filing season began on January 24.
To avoid future tax headaches, some experts recommend taking the following three steps when preparing to file your return.
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One of the first things you need to consider is whether you will file your own taxes this year or have someone else do it for you.
January is a good time to hire a tax preparer, said certified financial planner Anna Sergunina, president and CEO of MainStreet Financial Planning in Los Gatos, California. "Don't wait until March to find a tax preparer," she warned. "Most tax preparers will be too busy to take on new clients that late in the tax season."

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If you're looking at tax software options, now is a good time to compare your choices. This includes IRS Free File, which is an option if your 2022 adjusted gross income is $73,000 or less.

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There are still a few ways to trim your 2022 tax bill, even though many tax planning opportunities vanish after year-end. Experts say that there are a few ways to reduce your tax burden for the upcoming year. One way to do this is to maximize your deductions and credits. Another way to reduce your taxes is to take advantage of tax-advantaged accounts, such as 401(k)s and IRAs.

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Judy Brown, a CFP and senior financial advisor at SC&H Group in the Washington and Baltimore area, believes that thinking ahead and coordinating your tax and financial planning strategies can be extremely beneficial.

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For example, if you make your fourth-quarter estimated tax payment for 2022 on Jan. 17, you may be able to reduce your tax bill or minimize late payment penalties.
According to Brown, who is also a CPA, you can make individual retirement account contributions until the tax-filing deadline on April 18, 2023. With a Roth IRA, you won't get a deduction, but you may be eligible for a tax break with pretax IRA contributions, depending on your income and participation in a workplace retirement plan.
You may be able to deduct your health savings account contribution on your 2022 taxes, as long as you're enrolled in an eligible health insurance plan.

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Ajay Kaisth, a CFP and principal at KAI Advisors in Princeton Junction, New Jersey, says that now is the time to get organized with the tax forms you'll need for your 2022 return. By getting your paperwork in order now, you can make the tax-filing process much smoother come next year.
He suggested that you review last year's records and create a checklist of the forms you're expecting. Common forms may include a W-2 from your job and 1099-NEC forms for contract work, 1099-G for unemployment income, among others.

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A brokerage account may also entitle you to receive 1099-B forms for capital gains and losses, as well as 1099-DIV forms for dividends and distributions. For deductions, you may be able to take advantage of 1098 forms for mortgage interest, 5498 forms for individual retirement account deposits, and 5498-SA forms for health savings account contributions, among others.

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It is advisable to wait until you have copies of all the required forms before filing your tax return. These forms, known as "information returns," are sent to both the IRS and the taxpayer every year. If the information on your tax return does not match the forms, the IRS system may send an automated notice, which can take some time to resolve.

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"If you aren't sure whether something is important for tax purposes, it is better to retain the documentation," Kaisth said.