How Physicians Can Start Preparing for Tax Season
Once the most wonderful time of the year comes to a close, we are faced with what is possibly the least wonderful time of the year—tax season. While it is tempting to forget about taxes until April, getting a head start now can help you avoid a lot of stress and rushing down the road.
Let’s take a closer look at how physicians can start preparing for tax season now, so they can have a peaceful spring season later.
Book Your Tax Appointment Early
Whether you run your own practice or are a high-earning salaried physician, your taxes are likely going to get a bit complicated. At this point in your career, you have probably already chosen to hire an accountant to help with your taxes. Don’t wait until March to try to reach out about your tax filing appointment. Get it on the books early so you have time after your appointment to gather any missing information or paperwork so you aren’t rushing to meet the April 18th, 2023 deadline. Not to mention, booking early means you have a better chance at getting an appointment that works well for your busy schedule.
Learn What Deductions You Qualify For
If you are self-employed and run your own practice, the good news is you have a lot of options when it comes to tax deductions. From office equipment and supplies, to your smartphone, to board exams and licensing fees, there are a lot of expenses you can write off. Your accountant can help you identify these expenses, but you’ll save a lot of time by researching these expenses yourself and coming to your appointment with detailed notes about what you spent.
Make More Retirement Contributions
The last thing you want after your tax preparation appointment is to have homework. To help you save on taxes (whether that be now or in the future), your accountant is likely going to encourage you to max out your retirement accounts. If you have an IRA, it’s not too late to max out your 2022 contributions. You actually have until April 18, 2023 to make any contributions for 2022 to your Roth or traditional IRA, but making them now means you’ll have one less thing to do after your tax preparation appointment.
For 2022, the IRA contribution limits were $6,000 for those under the age of 50 or $7,000 if you’re age 50 or older. Those limits rise to $6,500 and $7,500 for 2023, so while you have retirement on the brain, don’t forget to increase your automatic contributions so you don’t have to contribute a large lump sum this time next year.
Get Organized
A little organization goes a long way. Before tax forms and important paperwork start coming in the mail, get ready for them. Grab a few different file folders and label them appropriately (ex: investment income) and have them ready and waiting. That way, as soon as you get important paperwork in the mail, you can file it in the appropriate folder and have everything organized for your accountant. Now is also a good time to start organizing any receipts you need for deductions.