While it may seem a long time away, the last thing you want is for tax season to sneak up on you. By preparing now and making sure your tax withholdings are correct, you can save yourself a lot of time and headache once it’s time to file. Here are a few things you can do to ensure you’re on the right track for the upcoming tax season.

Maximize Your Health Savings Account (HSA)
If you have an HSA, maximize your contributions to take full advantage of the tax benefits. Contributions are tax-deductible, and the funds grow tax-free. For 2024, the maximum contribution limits are $4,150 for individuals and $8,300 for families, with an additional $1,000 for those over 55. Maximize your contributions to reduce your taxable income and save for future medical expenses.

Use Your Flexible Spending Account (FSA) Funds
FSAs also offer tax advantages, but they have a “use-it-or-lose-it” rule. Ensure you use the funds within the plan year or risk losing them. Check your plan details for any grace period or carryover options. As the year ends, review your FSA balance and plan your healthcare spending accordingly to maximize your tax savings.

Review your retirement contributions
If you have a 401(k) or an Individual Retirement Account (IRA), you may want to consider maximizing your contributions for the year. Doing so will not only help secure your future, but also reduce the amount of taxable income for the year.

Start Saving for Potential Tax Bills
Prepare for potential tax bills by setting aside money now. Significant life changes, like a new job or marriage, can affect your tax situation. Start saving in a separate account to reduce stress and financial strain when it’s time to file. You can use the IRS’ tax withholding estimator to a better idea of what you’ll be dealing with come tax season.

Additional Tips
Organize Your Documents Early: Gather all necessary tax documents, including W-2s, 1099s, and deductible expense receipts.

Update Your Information: Notify the IRS if you’ve had a change of address, or the Social Security Administration if you’ve had a name change.

Consider Professional Help: Seek help from a tax professional if your tax situation is complex.

Mark Your Calendar: The tax filing deadline for 2024 is April 15, 2025.

With these tips, we hope you’ll be better prepared for the fast-approaching tax season. For more information regarding taxes, check out our blog on tax security tips.