Having someone who handles your taxes is great, but knowing what is being filed is beneficial. This way, you can understand the process better and will be able to anticipate the questions that will be asked.

Start With Good Records
Keep track of your important documents. This could include receipts for big purchases, any
donations to charities, investments, medical bills, or costs related to a business if you’re
self-employed. Depending on how you purchase most things, your bank, or credit card company
will have an itemized list of all your transactions within their app. Some may even allow you to
export them as an Excel file, easy to submit to a tax planner or just look at yourself and review
the year.
Know What You Can Deduct
Many people miss out on deductions because they don’t know what qualifies. Common
deductions include mortgage interest, student loan interest, medical expenses that exceed a
certain percentage of your income, and contributions to retirement accounts.
If you work from home, you may even qualify for home office deductions. Understanding what
applies to you is key to helping you save.
Maximize Your Retirement Contributions
Contributing to retirement accounts like a 401K or IRA not only helps you in the future but can
also aid you in the present by reducing taxable income. If you haven’t maxed out your
contributions, consider increasing them before the deadline. Even a small increase in your
contribution can make a huge difference in the long run.
Consider Timing
Timing matters when it comes to taxes. If you’re planning major purchases or expect changes in
your income, think about whether it makes sense to handle certain expenses this year or next.
For example, if you’re on the edge of a tax bracket, deferring income or accelerating deductions
might benefit you. These decisions depend on your circumstances, so it’s worth considering the
full picture.
Get Professional Guidance
When it comes to tax planning, the earlier you start, the better. This is because you are allowing
yourself more time to explore strategies that could improve your outcome. On the contrary,
waiting until March or April limits what you can do for your situation. Tax laws change frequently,
and everyone’s finances are different. This is why working with a tax professional can help you
identify any opportunities beneficial to you that you may have missed on your own. If you have
any questions about this topic, our team at First State Bank is here to help. We can connect you
with the right resources and work with you to create a plan that supports your goals.

Disclaimer: This blog post is for informational purposes only and does not constitute financial
advice. Please consult with a financial advisor to determine the best strategy for your situation.