‘Don’t wait until March’ to hire a tax pro, says advisor — 3 moves to make before the 2023 tax filing season opens

One of the first things to consider: Will you be filing your own taxes this year or tapping an expert to file a return on your behalf?

If you’re planning to hire a tax preparer, January is a good time to find someone, said certified financial planner Anna Sergunina, president and CEO of MainStreet Financial Planning in Los Gatos, California.

“Don’t wait till March,” she warned. “They most likely will not be taking on new clients that late in the tax season.”

For those eyeing tax software, it may be a good time to compare your choices, including IRS Free File, an option if your 2022 adjusted gross income is $73,000 or less.

While many tax planning opportunities vanish after year-end, experts say there are still a few ways to trim your 2022 tax bill.

“I believe there is tremendous value in thinking ahead and coordinating both your tax and financial planning strategies,” said Judy Brown, a CFP and senior financial advisor at SC&H Group in the Washington and Baltimore area.

For example, the fourth-quarter estimated tax payment for 2022 is due on Jan. 17, which may reduce your tax bill or minimize late payment penalties.

You can also still make individual retirement account contributions until the tax-filing deadline on April 18, 2023, said Brown, who is also a CPA. While Roth IRA deposits won’t provide a deduction, you may get a tax break with pretax IRA contributions, depending on your income and participation in a workplace retirement plan.

You may also score a 2022 deduction by making a health savings account contribution by the tax deadline, assuming you’re enrolled in an eligible health insurance plan. 

Ajay Kaisth, a CFP and principal at KAI Advisors in Princeton Junction, New Jersey, says it’s time to get organized with the tax forms needed for your 2022 return. 

“If you have not already done so, review last year’s records and create a checklist of the forms” you’re expecting, he suggested. Common forms may include a W-2 from your job and 1099-NEC forms for contract work, 1099-G for unemployment income, among others. 

With a brokerage account, you may also receive 1099-B for capital gains and losses and 1099-DIV for dividends and distributions. For deductions, you may have 1098 for mortgage interest, 5498 for individual retirement account deposits, 5498-SA for health savings account contributions and more.

You should wait to file until you have copies of every form you need. Known as “information returns,” a copy of these forms is sent to the IRS and the taxpayer every year. If your tax return doesn’t match the forms, the IRS system may send an automated notice, which may take time to resolve. 

“If you aren’t sure whether something is important for tax purposes, it is better to retain the documentation,” Kaisth added.