You may not be thinking about your 2023 taxes as the Seattle holiday season progresses, especially with Christmas quickly approaching. However, as the new year draws near, it could be a wise idea to think about your taxes. In an interview with KING 5, certified public accountant (CPA) and small company attorney Mark J. Kohler offered some insightful counsel.
According to a recent CNBC story, if your annual tax payment was greater than your tax liability or if you have additional withholdings, you might be eligible for a federal refund. According to IRS data, the average refund for 2023 is $3,054 as of October 27. Knowing your tax situation becomes essential to making informed decisions.
Kohler emphasizes work-related expenses, which are crucial for small business owners. Making sure you accurately document and report these costs on a 1099 form can have significant advantages. The 1099 form is a detailed record of earnings for non-salaried workers, like independent contractors and freelancers. Small business owners can maximize deductions and potentially increase their tax refunds by carefully filling out this form.
Kohler also emphasizes the importance of keeping abreast of changes to tax laws. Keeping yourself updated on any changes to the tax code may assist you in making wiser financial choices. Keeping abreast through trustworthy sources or with a tax expert provides valuable information for any future adjustments to your tax strategy.
As the year comes to an end, remember to make retirement contributions—it’s a wise tax-saving strategy. Making contributions to retirement funds, such as Individual Retirement funds (IRAs) or 401(k)s, offers immediate tax benefits in addition to long-term financial rewards. Since these account contributions are frequently tax deductible, they lower your taxable income for the current year.
Kohler also emphasizes how important it is for small businesses to take advantage of as many allowable business costs as possible. Making sure you have the right paperwork in place before you purchase office supplies, equipment, or other essential business expenses might save you a significant amount of money in taxes.
In summary, even though the holidays are a time for joy and celebration, it can be wise and helpful to take a moment to consider your year-end tax plan. Whether it is comprehending possible refunds, maximizing business deductions, keeping up with changes in tax laws, managing work-related expenses, or making contributions to retirement accounts, these straightforward suggestions could help Washingtonians manage their tax status as the new year dawns.