4. Round Up Your Receipts
The receipts you’ll have to provide depend on whether you claim the standard deduction or itemize your deductions. The best thing to do before tax season is to choose whichever brings the biggest deduction, and the only way to know for sure is to add up your itemized write-offs and compare the number with your standard deduction.
For the 2022 tax year, the standard write-off for single taxpayers is $12,950, and for married couples filing jointly, it is $25,900. This amount increases in 2023 to $13,850 for single taxpayers and $27,700 for married couples filing jointly.
Make sure you also have the receipts for investment-related expenses, property taxes, and medical costs not reimbursed by insurance or covered by any other health plan (such as an HSA or a flexible spending account). All of the above are subject to limits, but if they are substantial enough, it could be worthwhile to itemize.
If you itemize your write-offs, you will also need to gather any backup you have for charitable contributions. For instance, if you’ve donated $250 or more, you need to have a written acknowledgment from the charity indicating the amount and stating that you didn’t receive anything in return (token items are excluded). If you don’t have one, get in touch with the charity and request one. The last day of the tax season is April 18, 2023, so make sure you do it on time.
If you have business expenses and income to report on Schedule C, you will have to share your receipts for expenses, records and books, such as the accounting system, and relevant bank and credit card statements.
