We’ve almost reached the end of another year, and that means tax season is just around the corner. Whether you’re filing your taxes yourself or hiring an accountant to help you with tax preparation in MA, it’s important to get all your ducks in a row before the year ends. At ABC Payroll, our accountants can help you ensure that you have all the information you need to have everything in order and file your taxes on time.
Here are three important things to add to your end-of-year checklist for tax preparation in MA.
Check Your Withholdings
As of 2020, the IRS changed how they handle withholdings for federal taxes. Check your W-4 to ensure that you’ve been withholding the correct amount. If not, you can file a new W-4 to correct the error. A mistake in your withholdings could result in an unexpected refund, but it can also go the other way, and you’ll get stuck with a larger tax bill than you were expecting.
Contribute to Your Retirement Account
If you have a traditional IRA or a 401(k), you want to put as much into it as you can before the end of the year. The money in those accounts is funded with pre-tax dollars and compounds over time, so it’s a wise investment in your future to contribute to it. You can also get a better tax refund by contributing to your retirement account, so it’s smart to put as much money in as you can. For 2023, the maximum 401(k) contribution is $22,500, plus $7,500 in catch-up contributions if you’re over 50. If you’re eligible, you can also consider converting some of your assets from your traditional IRA or 401(k) into a Roth IRA. You don’t have to pay taxes on money in a Roth IRA when you withdraw it, so it can give you some cashflow flexibility.
Spend Your FSA Funds
If you have a flexible spending account (FSA) for healthcare costs, you’ll want to spend it before the end of the year. You’ll have to pay taxes on anything left in your FSA on December 31st, and you’ll lose access to any leftover money unless your employer allows for rollovers into the next year.
Tax Preparation MA | ABC Payroll
These are just a few of the things you should have on your end-of-year tax prep checklist. There are plenty of other things you can do to make the process easier and maximize your refund. When you come to ABC Payroll for tax preparation in MA, you can be confident that you’re ready for tax season.
