A Practical Guide to Tax Season Preparation

What to Do Before Filing Your Taxes

Tax season in the United States is a bureaucratic period, but it is also a strategic one.

The way you prepare before filing your return can determine not only the size of your refund or the amount you owe, but also your financial organization for the next 12 months.

Preparing properly before filing is a smart decision.

1. Understand Your Situation Before Filling Out Any Forms

Before opening any tax software or sending documents to your accountant, conduct a simple review:

• Did your income increase or decrease compared to last year?
• Did you change jobs?
• Did you start working as self-employed?
• Did you buy a home?
• Did you have a child?

The U.S. tax system, administered by the Internal Revenue Service (IRS), operates based on income brackets, specific credits, and deductions. Even small changes can significantly impact your final outcome.

2. Organize Documentation Strategically (Not Just Store It)

Most people simply gather forms like W-2 or 1099 and assume that is enough. It is not. Your organization needs to be strategic.

Separate documents by category:

• Income (W-2, 1099-NEC, 1099-INT, 1099-DIV)
• Investments
• Medical expenses
• Mortgage interest
• Retirement contributions
• Charitable donations

If you are self-employed or run a side business, your attention must be even more detailed.

3. Review Your Tax Credits — They Are More Valuable Than Deductions

There is an important difference between a deduction and a tax credit.

A deduction reduces your taxable income.
A credit directly reduces the amount of tax you owe.

Common U.S. credits include the Child Tax Credit, Earned Income Tax Credit, and American Opportunity Credit, among others.

If you experienced family changes, paid education expenses, or made energy-efficient improvements to your home, it is worth reviewing your eligibility carefully.

4. Evaluate Whether Itemizing Deductions Makes Sense

Since the 2017 tax reform, many taxpayers have opted for the standard deduction instead of itemizing.

Depending on your profile, it may still be worth considering itemized deductions such as:

• Mortgage interest
• State and local taxes
• Significant charitable donations
• Medical expenses above the allowed threshold

Do not automatically assume the standard deduction is your best option. Run the numbers.

5. Review Retirement Contributions Before the Deadline

Many people do not realize that you can still contribute to an IRA for the previous tax year until the filing deadline (usually April).

This can reduce your taxable income and, depending on your situation, generate meaningful savings.

If you contribute to a Traditional IRA, Roth IRA, or SEP IRA, verify whether there is still room for strategic adjustment.

6. Extra Attention for the Self-Employed

If you received a 1099 or work as a freelancer, rideshare driver, consultant, or small business owner, your tax responsibility is greater.

You are responsible for:

• Self-employment tax
• Quarterly estimated payments
• Detailed records of deductible expenses

Deductible expenses may include home office (if eligible), equipment, software, and business-related travel.

7. Check for Errors Before Submitting

Simple mistakes can delay refunds and trigger IRS notices:

• Incorrect Social Security number
• Wrong banking information for direct deposit
• Missing 1099 forms
• Income inconsistencies between your return and forms received by the IRS

Today, much of the cross-checking process is automated, and discrepancies are detected quickly.

8. Plan How to Use Your Refund (If You Receive One)

If you expect a refund, avoid treating it as “extra money.”

Ask yourself:

• Do I have high-interest debt?
• Do I need to strengthen my emergency fund?
• Can I invest this amount?

A refund is essentially money you lent to the government interest-free throughout the year. Using it impulsively undermines the opportunity to improve your financial structure.

9. Adjust Your Withholding for the Next Year

Tax season does not end when you file your return.

If you received a very large refund or had to pay a significant amount, this indicates a mismatch in your withholding during the year.

Use this moment to review your W-4 form (if employed) or adjust estimated payments (if self-employed).

The ideal goal is balance: neither a large unexpected tax bill nor an excessive refund.

10. Consider Professional Support When Necessary

Not everyone needs an accountant. However, certain situations justify professional assistance:

• Multiple income sources
• Complex investments
• Sale of property
• Inheritance
• Business activity

Sometimes the cost of professional support is lower than the amount it helps you save — or the risk it helps you avoid.

Written by

Gabriel Gonçalves