No matter when or how you file taxes before the deadline of April 15, you can take steps to learn what you need, pick an organization method that works for you, and prepare for financial impacts.
163 million: That’s the number of tax returns the IRS processed in 2023.1 Whether you were an early e-filer and hit “send” on the first day you could, or wait until the last minute and prefer paper, you can take steps now to understand what you need to file your taxes, stay organized, and finish this important to-do on the date that works for you.
1. Know what you need from year to year.
What the IRS requires mostly doesn’t change. What may change is new-to-you forms—for example, proceeds if you are a beneficiary to an estate or make a withdrawal from a retirement savings account. In addition to key documents, you’ll also need some personal details.
- W-2s (must be distributed by January 31)
- Social Security numbers for you, your spouse, and your dependents (if applicable)
- Last year’s federal and state tax returns
- Bank statements from this year
- Mortgage interest statement from this year
- 1099 forms (must be distributed by January 31)
- Charitable donations (monetary or in-kind) from the tax year
- Information on any eligible tax credits or deductions
2. Organize your documents and information.
Around January 31, you’ll start to receive tax-related forms, either through the mail or e-mail. But tax information may also accumulate through the year—for example, if you make a donation in June, how do you track the amount and the receipt?
The obvious answers are either a physical or electronic filing system. But really what you want to look for is a way that you can use year to year to keep and store information. Maybe you quickly scan receipts and tuck them into electronic folders organized by type or month. Or, set up time—a half hour block every month—to file what you need.
It’s easy to sign up for e-delivery of your tax documents from Principal®. The most likely one you may receive is a 1099R. Here’s how:
- Do you have a Principal.com account?
- Log in and click on “My profile” on the top right.
- Select “Manage delivery preferences,” and check the box for “Tax documents.”
- Click the “View terms (PDF)” button, select email notification, and select the email address where you want notifications sent. Your e-documents should be available the next day.
- Don’t have a Principal.com account yet? No problem. To get started, log in at Principal.com. Then, follow the steps above.
As you set up or update your account, we recommend using an email that you’ll potentially have forever—not one associated with a work account.
3. Find the tax prep method you trust.
You have several options.
- Prepare your return yourself; 43% of all filers2 choose that method. Some filers in lower income brackets may be able to access free software from IRS partners. All filers, regardless of income, can use IRS fillable forms and also file for free. Or, there’s software such as TurboTax, H&R Block, or Tax Act. You may choose, too, to file via a paper return, although fewer and fewer people go that route. (One advantage of filing electronically is direct deposit of any expected refunds into a bank account.)
- Work with a tax preparer.
Once you’ve filed your taxes, there are two things to consider for next year’s financially planning goals.
Did you get a refund—or have to pay taxes?
If you consistently receive a big refund, you may want to consider adjusting your withholdings so that you receive more of each paycheck. If you regularly have a tax bill, think about how you’ll pay for it. And, consider adjusting your withholdings to set more aside throughout the year, too.
Beyond your withholding decisions, you can also review what happened in your life, or what will happen next year, that might demand a rethink in your tax strategies. For example, are you retiring? Paying off your mortgage? Did you experience divorce or death in your family? All of these have an impact. Consult your tax advisor before you make any final decisions.
You can make a refund work harder for you.
The temptation to spend any refund is strong—and that’s OK. But if you can put some or even all of a refund to work, you may be able to accomplish longer-term goals such as:
What’s next?
The amount you contribute to a retirement account you have through your employer is pre-tax, which means it lowers your taxable income. Do you want to boost what you’re saving? Log in to principal.com
