What to Ask Your Financial Planner: Preparing for the 2025 Tax Filing Season

With tax season just around the corner, January is the perfect time to get organized and ensure you're ready to file efficiently. Discussing the right topics with your financial advisor now can save you time and money later. This can also help ensure that you gather all the information and documentation that you will need to be able to substantiate your return if the IRS should question anything.

Also, your Wedbush financial advisor might suggest some things that you have not thought of to flow through your return.

Gather Essential Documents

It is important to gather all essential documents that will support the numbers entered on your tax return. This includes documentation for income such as:

• W-2 from your employer

• 1099-Misc forms from any consulting or freelance clients

• 1099-B forms for any gains or other income from brokerage or investment accounts

• Forms from any pension or annuity income you received

• Income and expenses from a rental property you own

• Interest and dividend income

On the expense side, you will need documentation for:

• Mortgage interest and local property taxes paid

• Charitable contributions made

• Any deductible business expenses

Depending upon your unique personal situation, there may be other documentation that you need. This could include any income earned or received as well as documentation of any expenses that you will be deducting.

Having proper documentation helps ensure that nothing is omitted from your return and that you can substantiate everything on the return. Your tax professional and/or your financial advisor can offer their expertise in the area.

Review Tax Law Changes for 2024

As you prepare for the 2025 tax season for filing 2024 returns, this is a good time to ask your tax professional or financial advisor about any changes in the tax laws that will impact your 2024 return.

There are often changes in the limits for contributions to retirement accounts, certain deductions, tax credits and other areas that might impact your personal situation. For example, this is a good time to ensure that you have maxed out contributions to your workplace 401(k).

If you are looking to be able maximize your charitable deductions, be sure that you know the limits in terms of your adjusted gross income to allow you to maximize your deductions here.

Consider Year-End Tax Moves

While reviewing your 2024 tax situation at year-end, consider making some moves if they will help reduce your tax bill. These might include:

• Charitable contributions, including donating shares of appreciated securities

• Tax-loss harvesting to offset realized investment gains for the year

• Ensuring that you have maximized contributions to retirement plans

• Others unique to your situation based on the advice of your tax professional

Plan for Next Year's Tax Strategy

The best time to start planning your tax strategy for the 2025 tax year is right after filing your 2024 return. At this point, the rules and limits for certain types of income and expenses will be fresh in your mind.

This is also a good time to give some thought to what might be different in 2025. Will your income be higher or lower? Do you anticipate taking capital gains on stocks or other investments? Will there be a major life change such as getting married or having a child? Will you be getting a promotion or moving to a higher paying position at another employer? Are you in line for a hefty bonus early in 2025 based on your performance in 2024?

This is a good time to plan out your retirement plan contributions for the year to ensure that you max them out. Be sure to do 2025 tax planning with your financial advisor early in the year to allow you to make any financial decisions needed to help lower your tax liability.

Contact your Wedbush financial advisor to discuss your 2024 and 2025 tax situation. They can help you get organized and plan for the future.

Disclosure 

Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor.  

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.  

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