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Investor Insights Blog|Tax Preparation Checklist

Tax Insights

Tax Preparation Checklist

Tax season can be stressful, but it doesn’t have to be if you adequately prepare and have a plan to maximize your situation. Whether you file taxes yourself, or work with a financial professional, review the Tax Preparation Checklist below for a basic outline of items you’ll need and ideas to consider as you prepare to file.

Review the checklist below before you start your tax return or meet with a tax professional to help make the process smoother and ensure you’re maximizing any potential tax savings.

Note: The following is a general checklist. Because every situation is unique, be sure to work with a financial or tax professional to review your specific goals and needs.

[Checklist] 5 Things to Consider During Tax Time

1. Maximize retirement account contributions for potential tax deductions

One way to potentially reduce the amount of taxes you owe for 2023 is to maximize your IRA contributions if you haven’t done so.

Many people don’t know they can contribute to a new or existing IRA for the 2023 tax year before the tax filing deadline on April 15, 2024.

Contributions to a tax-deferred account, like a Traditional IRA, may provide a tax deduction in the amount you contribute for that tax year (pending eligibility). Check the requirements outlined by the IRS to verify the amount you can contribute to a Traditional IRA for 2023 and if it can be deducted from your taxable income.

Video: How Retirement Accounts Could Help You at Tax Time

In addition to contributing to an IRA, contributing to another tax-advantaged account, such as a Health Savings Account (HSA), is another opportunity for potential tax deductions as long as IRS eligibility requirements are met.

Keep in mind, you must be enrolled in a high deductible health plan to be eligible to open an HSA.

When considering a Traditional IRA, it’s possible to invest in assets beyond the stock market such as real estate, digital currency, precious metals and more with a self-directed Traditional IRA.

Doing so allows your investments to grow potentially tax-deferred and offers the possibility of a tax deduction.

2. Explore Roth IRAs

If you make a 2023 contribution to a Roth IRA before the tax filing deadline on April 15, even if you open the account in 2024, it will not count toward your 2024 contribution limits.

This allows you to catch up on missed saving opportunities from 2023 while keeping open the ability to maximize your 2024 Roth contributions as well.

In terms of long-term tax savings, Roth IRA funds are contributed after-tax but grow tax-free. Furthermore, funds distributed from a Roth IRA after age 59½ are also tax-free after the account has been established for five years.

You may want to consider a Roth IRA if you exceed the MAGI limits to qualify for a deduction on your Traditional IRA contributions. Be sure to talk with a financial professional to determine what is best for you.

Finally, when considering a Roth IRA, it’s possible to choose a self-directed Roth IRA to invest in assets outside of the stock market. Using a self-directed Roth IRA held with a directed custodian, such as Equity Trust, offers the opportunity to invest in a wide variety of assets (real estate, notes, precious metals, digital currency, etc.) in a tax-free environment.

[Read More: 3 Reasons to Consider a Roth IRA Before the Tax Deadline]

3. Recognize possible saving opportunities

If you realize you didn’t save as much as you hoped throughout 2023, there’s still time to save for retirement, healthcare, and/or a child’s education in a tax-advantaged environment.

It’s still possible to open and contribute to an IRA, Health Savings Account (HSA), or Coverdell Education Savings Account (CESA) before the deadline on April 15, 2024. As mentioned, contributions before the deadline can be made for the 2023 tax year for any of the three accounts.

4. Know your contribution limits

The contribution limits established by the IRS each year are applicable for any Traditional or Roth IRAs you have, regardless of where the accounts are held.

Keep in mind, the maximum contribution limit includes all contributions per account type, whether it’s in one account or split across multiple accounts.

5. Get yourself organized

Below are some basic items and documents you may need as you or your CPA prepare your tax return this year.

Items to organize

The IRS offers a full checklist of documents you may need when filing taxes, but the following is a condensed list that will apply to most individuals.

To speed up the process, it may be helpful to gather any/all documentation you might need before you start filing your tax return or meet with your adviser, CPA or tax professional.

Personal Information

  • Social Security Number – For you and your dependents
  • Proof of identification – Photo ID
  • Copy of last year’s tax return – Not required, but helpful to have as a comparison point
  • Bank account and routing number – If you plan on depositing your refund directly to your account

Income Information

  • W-2 forms – from all employers
  • 1099 forms – interest and dividend statements from banks

Am I eligible to make a contribution? How much can I contribute?

The IRS publishes maximum IRA contribution limits and catch up provisions each year. Summaries for each type of contribution can be found on Contribution Limits.


What kind of reporting should I expect from Equity Trust on my self-directed IRA?

Equity Trust makes it easy for you to manage your self-directed IRA. You will have around-the-clock secure online access to your account in addition to quarterly statements.

With myEQUITY, account holders can easily filter, sort and export your account’s portfolio positions, cash ledger and transaction history. You can also stay informed of the process of your account activities with real-time transaction notifications and by reviewing each activity’s unique status page.

In addition to quarterly statements, Equity Trust provides 1099 and 5498 tax reporting related to any distributions or contributions made in a given tax year within your account.


What’s the difference between a transfer and a rollover?

A transfer is when the same type of retirement plan is moved from one firm or custodian to another. Moving funds from one firm or custodian to another using a rollover involves a request of a distribution of your retirement plan assets. You have 60 days after the distribution to roll over funds to the new firm or custodian to keep them tax-deferred. A direct rollover is moving assets from one type of plan to a different type of plan. For example, from an employer-sponsored 401(k) to an IRA.

Want to learn more about a self-directed IRA, HSA, or other account? We’re here to help. Set up a consultation with an Equity Trust Senior Account Executive today.

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