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  • Writer's pictureAlex Kreis

Tax Guide for Medical Professionals: Get It Done the Right Way

Updated: Feb 13, 2023

Taxes take a big bite out of your paycheck, but there are tax breaks available for taxpayers to claim during income tax return (ITR) filing. However, it isn't a new mystery that people often end up rushing to file their taxes at the last minute—and sometimes make mistakes. It is important to plan for taxes—and now is a good time to start thinking about how you can save money on taxes for the year 2023.

Tax Preparation Checklist: Steps You Can Take Before Filing Income Tax in 2023

As the day to file your income tax returns (ITR) approaches, you might be panicking. Don't worry! We've got you covered this time. The following are the seven steps for tax planners; you should take before filing income tax in 2023 so that you aren't left scrambling at the last minute:

Hire a Tax Preparer

If you don't have a tax preparer, ask friends and advisors for referrals. Be sure the person you choose has a PTIN ( preparer tax identification number) showing they are authorized to prepare federal income tax returns.

Before hiring a tax preparer, ask about the fees. The fee depends on the complexity of your tax return. The IRS website has tips for choosing a preparer and links to the IRS directory of preparers, which you can search by credentials and location.

Make an appointment

The sooner you get in touch with your tax preparer, the sooner you can get started on your return. If you anticipate a refund, it will come sooner as well. If you procrastinate in scheduling an appointment with a tax preparer, there may not be enough time before the filing deadline to complete everything. That means you could miss out on opportunities to lower your tax bills—like making a deductible contribution to an individual retirement account (IRA) or a health savings account (HSA).

Gather together all your documents

As you prepare your tax return, make sure that you gather together all of the documents relating to your income in 2022. You will receive all of the income tax documents you need from employers and financial institutions by January 31st. Check that the information on each form matches your records.

Some of the most common forms are:

  1. If you had a job, you may need to file a Form W-2.

  2. Income from investments—various forms 1099 (-INT, -DIV, -B, etc.), K-1s

  3. The various 1099 forms that report other income you received, such as interest and dividends (Forms 1099-INT and 1099-DIV), and nonemployee compensation paid to independent contractors (Form 1099-MISC). Brokers aren't required to mail Form 1099-B until mid-February, so those may come a little later.

  4. You can use Form 1098 to report any mortgage interest you paid.

  5. If you had any gambling winnings, you should have received a Form W-2G.

  6. Social Security benefits—Forms SSA-1099

  7. Form 1099-R for IRA/Pension Distributions

  8. Income from sales of property—original cost and improvements, escrow closing statement, or settlement statement for cancellation of debt (Form 1099-C)

  9. Last year's installment sale information—forms 6252 and instructions, principal and interest collected during the year, payer's Social Security number, and address.

Keep track of your receipts

The receipts you'll need to provide depend on whether you choose to itemize your deductions or claim the standard deduction. If you choose the standard deduction, you won't have to provide any receipts. However, if you decide to itemize, keep track of all your expenses and compare that total with your standard deduction amount.

Single taxpayers can claim a standard deduction of $12,950 for the 2022 tax year; married couples filing jointly have a standard deduction of $25,900. Those figures increase in 2023 to $13,850 for singles and $27,700 for married couples filing jointly. Read IRA guidelines on tax inflation adjustments for 2022 & 2023

Keep track of any receipts that prove you paid out-of-pocket medical costs that aren't reimbursed through insurance or another plan, property taxes, and investment-related expenses. These are all subject to limits, but if they're substantial enough, it may be worth your while to itemize. If you itemize your deductions, collect any backup you have for charitable donations. The IRS has a free publication that gives more details on charitable donations.

If you have business income and expenses to report on Schedule C, you will need to provide your books and records and any receipts for expenses related to your business. Check out the 2022 Instructions for Schedule C

Personal information

The IRS wants to know who's filing and who's covered in your tax return. To do this, you'll need Social Security numbers and dates of birth for yourself, your spouse, and your dependents.

Make sure you have that information handy when you sit down with your tax preparer.

For example, if you own a vacation home or rental property, be sure to note the addresses. If you sold a property in the past year, be sure to note the dates you bought and sold it, the amount you originally paid for it, and how much you received from the sale.

File for an extension when you need more time to file your taxes

If you need more time to complete your tax return, you can request an extension to October 15th. However, you'll still have to estimate the amount of taxes you owe and pay that amount by the regular April deadline to avoid penalties and interest.

Plan in advance to receive your tax refund

If you're expecting a tax refund, you have several options for how to receive it.

  1. You can apply some or all of your refund toward next year's estimated taxes. If you usually pay estimated taxes throughout the year, that can help cover the first installment due in April.

  2. You can choose to receive your refund by check in the mail or have it directly deposited into your checking or savings account.

  3. You can contribute your refund to certain types of accounts or buy U.S. savings bonds through TreasuryDirect. Check out the refund information laid out by IRA. You can also choose to deposit your refund in several different accounts by completing Form 8888.

Let your tax preparer know whether you want to file an amended return.

What's the Tax Filing Deadline?

The deadline for filing income tax returns is April 15 following the tax year. However, taxpayers who live in Maine or Massachusetts have until April 18, 2023, to file their 2022 tax return because Monday, April 17, 2023, is Patriot's Day in those two states; it is also a holiday (Emancipation Day) in Washington, D.C. It's advisable to check with your tax preparer and confirm the dates, but on the safer side be prepared with all your income tax documents by April 15th.

If you are a medical professional and you want a trustworthy expert team to help you with your tax planning and management, then look no further than Prime Financial Services. We can help you reduce your tax burden with expert advice. We also offer FREE seminars for educating the medical community on the importance of tax planning, contact us for blocking your seat!


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