Year End Tax Time To-Do List

December is a busy time of year, with holiday shopping, parties, and family gatherings. But Tim Andreas with Global Asset Management Group in Lake Charles suggests that it’s also the perfect time to start thinking about your 2024 tax filing, from both financial and time management perspectives. He offers the following list of actions taxpayers can take now to ensure a positive tax filing experience leading up to the April deadline.

Schedule an appointment. If using a CPA or tax preparer, schedule an end of the year review to inform them of changes that may have occurred during the year to income, marriage, dependents etc. Also, look over last year’s tax return to identify details that might have been overlooked. Review contributions into 401(k)s, Traditional IRAs and Roth IRAs to plan last minute changes to contributions to max the limits allowed for deductions to income. “Spending a little time now will alleviate missing something when trying to rush and file close to the deadline,” Andreas says.

Be aware of new 2024 tax policies. Contribution limits have increased to the allowed contribution amounts for Tax-Advantaged Retirement Savings accounts. Marginal Tax Brackets and the Standard Deductions have been adjusted higher meaning you should be able to keep more of your 2024 Income. The Required Minimum Distribution (RMD) Age for Tax-Advantaged Retirement Savings Accounts has increased to 73 if you were not already under RMD status from prior years. For 2024 and later years, RMD’s are no longer required from designated ROTH accounts. You must still take RMDs from designated Roth accounts for 2023, including those with a required beginning date of April 1, 2024. The 2024 contribution limits for employees to 401(k) and 403(b) plans increased to $23,000 annually up from $22,500. Employees age 50 and over can contribute an additional $7500 for a total of $30,500. The IRA contribution limits for 2024 are $7000 for those under 50 and $8000 for those age 50 and older. There are income limits and phase outs based on filing status. Verify eligibility with your CPA.

Identify available tax credits. You may qualify for an annual residential clean energy tax credit of 30% of the costs for qualified, newly installed property from 2022 through 2032. Top tax credits and deductions for 2024 are: Child Tax Credits, Earned Income Tax Credit, American Opportunity Tax Credit, Student Loan Interest Deduction, IRA and 401(k) deductions. Home improvements may be tax deductions like solar panels, geothermal heat pumps, energy-efficient windows and doors and biomass stoves. These are all subject to your individual circumstances and your tax preparer’s guidance.

Gatherer tax documentation early. If you’re in a hurry, it’s easy to forget or overlook events that could help with tax preparation and possibly increase your refund. “It’s human nature to wait until the last minute because we don’t like taxes and the thought of maybe having to pay,” says Andreas. “However, taking your time and reflecting on major life events that occurred might spark a memory of something smaller that happened during the year that could help your tax situation.”

Plan to file electronically to prevent a refund delay. This speeds up the process as well as having your refund electronically deposited. The normal processing time for personal tax returns takes approximately two weeks and refunds can take up to 21 days if all is electronic. Filing by mail can take up to six weeks to process and having your refund mailed could take approximately up to six months. However, if your tax return has been compromised in the past you will have to file a paper return. Discuss this with your tax preparer for options. Also, if you have had someone already claim your dependent falsely on a previous return the possibility of a rejected return is higher.

Consider the advantages of hiring a tax preparer. Tax laws change so regularly and keeping up with those changes only adds to the stress of filing which can cause errors or missing out on deductions. Andreas says allowing a professional to handle this important issue releases some of the headache of filing. He also recommends asking your tax preparer about working with the IRS on your behalf if you were to get audited. “This is something for sure that will put you on your own if you file your tax return yourself. That alone for some will be worth the cost of having a professional file your taxes.”

Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Tim Andreas and not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc., member FINRAISIPC. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. Global Asset Management Group is not a registered broker/dealer and is independent of Raymond James Financial Services.