Welcoming 2024 - - Things to consider for your Taxes

 

We wish you a very Happy and Prosperous New Year 2024.  Here's to a new year filled with limitless possibilities and positivity. We hope you have a sparkling year ahead that's filled with love, abundance and ever-growing prosperity.

 

As we reflect on another year of business, we would like to thank you for allowing us to be part of your life, growth, and most importantly your trust and support in our services. We look forward to serving you again this year!  

 

Changes/highlights for 2023 Tax Returns

 

  • Individual and corporate tax returns are due on April 15, 2024, the Partnership and S-corporation taxes are due on March 15, 2024, and nonprofits are due on May 15th, 2024.
  • With diversified incomes (i.e. K1) it is normal to file an extension (Business/Entity Returns extensions due September 15, 2024 and Individual and Corporate Returns extensions due October 15, 2024).  
  • US income tax is pay-as-you-go model.  Most Americans must pay at least 90% of their taxes by regular due dates or face interest-based penalties.  Following the Federal Reserve’s rate increases, the rate on underpayments has climbed to 8% annually.  Last quarterly payment for 2023 including additional tax payments due to non-wage income (e.g. capital gains) is due on January 16, 2024.
  • We are requesting all our clients to upload their documents by March 15th to ensure we are able to complete your individual returns by due date.  If you are looking to file an extension, we can calculate taxes due to avoid under payment penalties.

 

 

Changes and provisions for 2024 Tax Year

 

  • Retirement savings to a qualified account such as a 401(k) or 403(b) has increased to $23,000.  The limit on the total employer and employee contributions to these plans is now $69,000. If you're age 50 or older, you're eligible for an additional $7,500 in catch-up contributions. The limit on annual contributions to an IRA increased to $7,000 (or $8,000 for those age 50 or older).

  • The annual gift tax exclusion will be $18,000 per person in 2024 which can be useful as you plan your estate.
  • The tax rate structure, which ranges from 10 to 37 percent, remains the same; however, the tax-bracket thresholds adjusted significantly (~7%) for inflation so does the Standard Deductions (up by ~5%).
  • More compelling tax incentives with Green-energy tax breaks for buying electric vehicles and making home improvements
  • Foreign earned income exclusion increased
  • Amount you contribute to Health Savings Account has increased to $8,300.
  • For businesses, changes in employee retention credit, R&D credit, and threshold for certain deductions have been increased.

 

Get ready to handle your 2023 Tax Return

We recommend that you schedule your appointment for finalizing the 2023 tax with us now and consider uploading your tax documents as you receive them into the secure client portal. We are looking forward to supporting you again.  

 

 

Regards

Chitra Senthivel, EA, CAA  | Jim Raisio, EA | QianWen Bi, CPA