Quick Tips:

• Tax Day timeline
• What to do if you get audited
• How to avoid getting audited in the future
• Keep complete records
  • Provide complete information
  • Avoid Math Errors
  • Match statements
  • Do not repeat mistakes
• Getting the most out of your tax return
  • Filing correctly
  • Tax deductions
  • Tax Credits
  • Contribute to an IRA

So, you submitted your taxes in time for Tax Day April 15? Don’t procrastinate, stay ahead of next year’s tax season.

As tax season concludes, many taxpayers see it as a break until the next year but learn more how to use post tax season to your advantage.

Upon submission of your tax returns, the next step is receiving a response from the IRS. If you filed via email, you could expect to receive a response within 24-48 hours via email. If you filed through post (mail) your response will be received by mailed letter.

The first response upon return submission from the IRS is “accepted”.

The next response will happen 21 days after with either “approved” or “rejected”. If you hear “approved,” your 2024 tax season (the tax returns you file in 2025) is over, and it is time to start planning for the next year!

What if you get audited?

Getting a “rejection” or audit from the IRS in response to your tax return can be scary but not end-all-be-all. An audit does not entirely mean the IRS suspects wrongdoing, it serves as a formal notification of mistakes on your return. Make sure to handle errors on tax forms right away.

Now, moving forward we strongly advise that you take extra precautions in the next tax season to avoid getting audited again.

Take these steps to avoid future audits: 

• Start right away by keeping complete records. This makes it much easier to comply with the IRS’s documentation requirements. 
• Provide complete information. Do not overlook information like social security numbers or other small details. 
• Avoid math errors. Check all math, then double check, and then triple check to ensure no mathematical errors are present in your return.
• Match statements. The numbers on any W-2 and 1099 forms must match the returns to which they are tied.
• Do not repeat mistakes! The IRS will often check returns from previous auditors to make sure mistakes aren’t repeated.

It is important to reflect post tax season. Ask yourself, did I take all the precautions possible to avoid an audit? If you were audited, do you know why? How did you handle it? If your return got approved, how can you keep ensuring that your future returns are also accurate?

Lastly, one of the most important questions you could ask yourself is if you yielded the highest tax return?

Need more? Here’s what to do if you get audited.

Using Post Tax Season to Optimize your return

Through preparation you may optimize your tax return. Take the time after the 2024 tax season to see how you can do that. To help, here are some of your options:

Make sure you are filing correctly.

Filing as single or married makes a huge difference in your yearly tax return as it determines your income tax bracket.

Are you a single parent? Alleviate tax liability by filing as head of household. Heads of household can claim a standard deduction of $21,900 compared to $14,600 for those filing as single.

For married couples, filing jointly makes the most financial sense. This is because joint fillers usually get more tax benefits. Lisa Greene-Lewis, a CPA and tax expert with TurboTax, summed up the benefits like this: “You can make more income but be taxed less because the tax brackets and the income ranges are larger if you’re married filing jointly”.

Tax deductions

Have you been voluntarily taking out extra of your income standard deduction or itemized deduction? No? Well, we are here to recommend you should! You can reduce your overall tax bill by taking deductions, which allow you to lower your taxable income and, therefore, the taxes you owe.

Standard deduction is a fixed amount set by the IRS, and itemizes deductions reduces your tax bill by accounting for specific expenses.

Tax credits

First off, tax credits are not tax deductions, but both can help optimize your wallet in tax season. A tax credit is a claimable dollar-for-dollar amount that reduces the income tax they owe.

For example, if you owe $10,000 and you’re eligible for a $1,000 tax credit, that credit lowers your tax bill by $1,000 — to $9,000.

There are several common tax credits you may be able to qualify for such as, Earned Income Tax Credit, Child Tax credit, and American Opportunity Tax Credit.

Contribute to an IRA

Contributing to an individual retirement account (IRA) can also lower your tax liability. While we advise taxpayers not to procrastinate and try and get ahead of filing tax returns, submitting to an IRA is one of the only things you can do as Tax Day approaches.

An IRA lets you contribute pre-tax dollars up to a certain amount as a sort of tax benefit.

More tips found here. Tax Strategies to Help Maximize Returns and Minimize Burdens

So What?

As financial advisors we see the importance of 1. Filing correctly to avoid audit, but 2. Reaping the benefits of the tax system.

Staying on top of taxes throughout the year will only bring positives to your wallet. It also helps you be prepared for Tax Day, ahead of time.

To learn more about preparing for next year’s tax season, plan a meeting with one of our advisors.