By: Pursuit Wealth Management
As tax season approaches, many Minnesota households begin organizing financial documents and reviewing filing options. Taking time to prepare can help reduce last-minute stress and improve accuracy.
Below are three general steps Woodbury and East Metro residents may consider as they prepare to file their federal and Minnesota income tax returns.
1. Gather Required Tax Documents Early
Collecting documentation in advance can make the filing process more efficient. Common documents may include:
- W-2 forms from employers
- 1099 forms (interest, dividends, retirement distributions, contract income)
- 1098 mortgage interest statements
- Brokerage statements reporting gains and losses
- Health Savings Account (HSA) documentation
- 529 plan contribution and distribution records
- Charitable contribution receipts
- Property tax statements for Minnesota homeowners
Residents may review document requirements and filing information at the website of the Internal Revenue Service (IRS.gov), which provides current federal tax guidance.
Minnesota residents should also review applicable state requirements, as state income tax rules may differ from federal treatment in certain areas.
Creating a dedicated folder — digital or physical — for tax documents may help reduce the likelihood of missing information.
2. Determine Whether to File Independently or Work with a Tax Professional
Individuals have several options when filing taxes.
Filing Independently
Some taxpayers choose to prepare and file their returns using tax software. Electronic filing (e-file) may reduce processing time and lower the risk of certain clerical errors. Taxpayers expecting refunds may also consider direct deposit options.
Working with a Tax Professional
In situations involving greater complexity — such as business ownership, rental properties, stock compensation, retirement account distributions, or significant investment transactions — consulting a Certified Public Accountant (CPA), Enrolled Agent (EA), or other qualified tax professional may be appropriate.
Each taxpayer’s circumstances differ, and decisions regarding tax preparation methods should reflect the complexity of their financial situation.
3. Consider Broader Financial Planning Implications
Tax filing reflects past financial activity. Financial planning may incorporate forward-looking considerations such as:
- Retirement distribution strategies
- Roth conversion analysis
- Capital gain timing
- Charitable giving strategies
- Required Minimum Distribution (RMD) planning
- Coordination between taxable and tax-advantaged accounts
For Minnesota residents, additional considerations may include:
- State income tax treatment
- Social Security taxation at the state level
- Minnesota property tax refund eligibility
- Estate tax thresholds
When evaluating whether to work with a financial professional, individuals may consider factors such as credentials, compensation structure, fiduciary obligations, scope of services, and experience working with clients in similar circumstances.
Final Thoughts
Tax season can provide an opportunity to review not only income reporting but also overall financial organization and planning.
Woodbury residents may benefit from:
- Organizing documentation in advance
- Evaluating the appropriate method for filing
- Reviewing whether tax decisions align with broader financial objectives
Because tax laws are subject to change and individual circumstances vary, it is important to consult with qualified tax and financial professionals before making decisions based on general information.
Important Disclosure
This article is for informational and educational purposes only and should not be construed as tax, legal, or investment advice. Pursuit Wealth Management does not provide tax or legal advice. Individuals should consult their tax professional, attorney, or other qualified advisor regarding their specific situation before implementing any strategy discussed herein.