Missed the year-end deadline? There’s still a few things you can do.
With all of these you may want to estimate your taxes before and after using your tax software. Or better yet, work with a tax pro like me that has more training and better software to work with.
I’m still accepting clients for the 2022 tax year.
SEP-IRA contributions can be done up until your tax filing day, including extensions. So, this can be done up-until the October 15, 2023 and impact your 2022 tax return.
File an extension here (I generally recommend everyone file an extension unless you expect a big refund).
Amended brokerage statements are a pain and it generally gives you more planning options to delay.
Fund your HSA, IRA
Both of these accounts can be contributed to up until April 18th, 2023. Be sure you qualify for an HSA plan if you do contribute.
If you’re in a disaster area?
Check the IRS page on disaster relief for your disaster(s). You may qualify for extensions and various penalty waivers.
Solo 401(k) Retroactive Start Date
Not for the 2022 tax year but in 2023 you will be able to contribute to a solo 401(k) up until tax filing if you have a single-member LLC or sole proprietorship. This can be great if weren’t sure if you had enough income to contribute throughout the year. All that’s thanks to the Secure 2.0 Act (see Section 317).
What to Do Next Year
While these options are helpful, one of the best things you can do is not mess up next year!
Set up a reminder for next year to be prepared. I like to estimate my income and prep for the big picture every time I pay my estimated taxes. For individuals/pass-through entities here’s the estimated tax payment deadlines.
Re-evaluate your accountant and financial planner relationship. Why did you miss out on tax planning? Also, you should know that some tax preparers are more focused on compliance and not proactive tax avoidance.
Many financial planners, including me, use a yearly calendar to stay on top of taxes and how to optimize for them like tax-loss harvesting and realizing short-term losses strategically.
Create a benchmark tax return using online tax software or your accountant around the end of the year to estimate your taxes and prep tax loss harvesting or even tax gain harvesting depending on your situation.
And you should evaluate your self-employed retirement options, ideally before year end.
Some things I would look at with you:
- Fringe benefits
- Health insurance
- Retirement Account (Solo 401(k) vs SEP IRA vs Defined Benefit Plan)
- Safe Harbor Rate so you know how much you need to pay each quarter to avoid penalties
If you want to learn more about your taxes the IRS has a great webpage that covers the essentials.
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