ASK MICKEY, CPA
QUESTION: Any Tax Tips for tax year 2024?
ANSWER: Tax tips for the 2024 tax year include:
1. Stay Informed: Keep yourself updated with any changes in tax laws or regulations for the 2024 tax year. Tax laws can change from year to year, so it’s important to stay informed to maximize your deductions and credits.
2. Organize Your Documents: Start gathering all necessary tax documents, such as W-2 forms, 1099 forms, receipts for deductible expenses, and any other relevant paperwork. Keeping everything organized will make the tax filing process smoother and help ensure you don’t miss out on any deductions.
3. Maximize Retirement Contributions: Consider maximizing your contributions to retirement accounts such as 401(k)s, IRAs, or HSAs (Health Savings Accounts). Not only can this help you save for the future, but contributions to certain retirement accounts may also be tax-deductible.
4. Take Advantage of Tax Credits: Look for any tax credits you may be eligible for, such as the Earned Income Tax Credit, Child Tax Credit, or education-related credits. Tax credits can directly reduce the amount of tax you owe, so take advantage of them if you qualify.
5. Consider Itemizing Deductions: Depending on your financial situation, you may benefit from itemizing deductions instead of taking the standard deduction. Common itemized deductions include mortgage interest, property taxes, charitable contributions, and medical expenses (if they exceed a certain percentage of your income).
6. Plan for Estimated Taxes: If you’re self-employed or have other sources of income that aren’t subject to withholding, make sure to plan for and pay estimated taxes quarterly to avoid underpayment penalties.
7. Review Investment Strategies: Review your investment portfolio and consider any tax-efficient strategies to minimize the tax impact of buying, selling, or holding investments. This might include tax-loss harvesting or investing in tax-advantaged accounts.
8. Stay Organized for Next Year: Throughout the year, keep track of any changes in your financial situation, such as marriage, divorce, the birth of a child, or significant purchases or investments. These changes can have implications for your taxes, so staying organized will help you be prepared for next year’s tax filing.
9. Consider Seeking Professional Help: If you have a complex tax situation or are unsure about certain tax matters, consider seeking help from a qualified tax professional. They can provide personalized advice and ensure you’re taking advantage of all available tax benefits while staying compliant with tax laws.
Remember, tax planning is a year-round activity, so staying proactive and informed can help you optimize your tax situation for the 2024 tax year and beyond.
