Every year, the Internal Revenue Service chooses a date at the end of January to mark the beginning of tax filing season. In 2023, that date was Monday, January 23rd. The traditional filing deadline is April 15th, but weekends and holidays alter the date. You have until April 18, 2023, to e-file or mail your taxes. However, those two dates are not the only significant dates you need to know about.
Know Your Tax Deadlines
The primary types of deadlines most individuals need to be aware of are estimated tax, extension and deduction deadlines.
Estimated Taxes
The IRS requires most people who earn an income to contribute to taxes throughout the year. When you work for an employer and receive a W-2, your taxes are deducted from your paycheck. However, if you are self-employed or a freelancer, you pay quarterly estimates once your tax liability crosses a threshold.
If you file quarterly estimated taxes, your final installation for 2022 is due on January 17, 2023. Your first quarter installment for the 2023 tax year is due on April 18th, the second on June 15th and the third on September 15th.
Extension Deadlines
You have until April 18th to file your tax returns unless you file an extension. If you need an extension, you must file it by Tax Day. After you submit a request to delay filing, you have until October 16, 2023, to file. If you expect to owe taxes, the IRS expects you to pay an estimated tax by April 18th.
Deduction Deadlines
If you need last-minute deductions to reduce your tax liability, you have a few options even after the first of the next tax year. You have until Tax Day to make a tax-deductible contribution to your IRA account. Bear in mind that Roth IRAs are ineligible. The IRS also sets limits on tax-deductible contributions, which vary based on income and employee benefit status.
Plan for the Current Tax Year
It seems unfair that you should think about this year’s taxes when dealing with last year’s. However, the best tax strategy is one you implement year-round. You can lower your tax burden by timing activities with the greatest impact, such as large purchases and sales.
Deferred Sales Trust
If you intend to sell investment real estate, a business or corporation, or another high-value asset, you need to consider how the sale will affect your taxes. Assets appreciated at the time of the sale may be subject to capital gains taxes. Before you sell these assets, you might want to consider whether a Deferred Sales Trust is right for you.
A DST allows you to defer your taxes until later and can reduce your overall liability. It also can provide you with a retirement income while simultaneously growing your wealth.
Get Started on Your DST With Reef Point
Reef Point’s sole purpose is to provide DST services for our clients. When you work with us, you work with one of only 13 approved Trustees in the country and a network of experienced professionals. Contact us today to learn more about our services.
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