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Capital Tax Pro and Accounting

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Capital Tax Pro and Accounting

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  • 2024 Taxpayer Tips

2024 Taxpayer Tips

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As we approach the 2024 tax season, it's essential to stay informed about key changes and strategies to optimize your tax situation. 

Here are important tips for taxpayers in 2024:

1. Understand the New Tax Changes

  • Standard Deduction Increase: For 2024, the standard deduction has increased to $14,600 for single filers and $29,200 for married couples filing jointly.
    Ramsey Solutions
  • Tax Bracket Adjustments: Income tax brackets have been widened to account for inflation, potentially lowering income taxes for many.
    Fidelity

2. Maximize Retirement Contributions

  • IRA Contributions: The contribution limit for IRAs has increased to $7,000 for tax year 2024, with an additional $1,000 catch-up contribution for those aged 50 and above.
    Fidelity
  • 401(k) Plans: Consider contributing the maximum allowable amount to your 401(k) to reduce taxable income and benefit from employer matches.

3. Leverage Tax Credits and Deductions

  • Child Tax Credit (CTC): Proposed changes may expand eligibility and increase the amount of the CTC. Stay updated on legislation that could affect your eligibility.
    Fidelity
  • Clean Energy Credits: Take advantage of tax credits for energy-efficient home improvements and electric vehicles before potential policy changes.
    Investopedia

4. Plan for Potential Policy Changes

  • Tax Cuts and Jobs Act Expirations: Be aware that certain provisions from the 2017 Tax Cuts and Jobs Act are set to expire by the end of 2025. Engage in year-end tax planning to prepare for potential increases in tax rates. The Wall Street Journal

5. Stay Compliant and Avoid Penalties

  • Estimated Tax Payments: Ensure you've paid at least 90% of your owed taxes by December 31 to avoid underpayment penalties, which have increased to 8% for the first three quarters of 2024.
    The Wall Street Journal
  • Required Minimum Distributions (RMDs): If you're a retiree, remember to take your RMDs to avoid penalties.
    Barron's

6. Consult a Tax Professional

Given the complexities and ongoing changes in tax laws, consulting with a tax professional can provide personalized advice and ensure compliance with the latest regulations.

By staying informed and proactive, you can effectively manage your tax obligations and take advantage of opportunities to reduce your tax liability in 2024.

  • 2024 Taxpayer Tips

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