Tax day is Monday, April 15, 2024. October 15, 2024, is the tax return due date for those filing extensions.
A few reminders as we get closer to the deadline:
April 15th, 2024, Deadlines:
- Traditional IRA Contributions: 2023 contributions to a traditional IRA can be made through April 15, 2024. Contributions are typically tax deductible and can be up to $6,500 for those under age 50 and $7,500 for those 50 and older.
- HSA Contributions: Tax filers who have a high-deductible health care plan can make tax deductible contributions to an HSA for tax year 2023 through April 15, 2024. Individuals can contribute $3,850 and families can contribute $7,750. Those 55 and older can contribute an additional $1,000.
Getting organized for 2023 Taxes[1]:
- Refer to your prior year’s return to note what was needed last year and ensure that you capture any changes in the 2023 tax year
- The primary categories of materials for tax season include:
- Income documentation:
- W2 income from employment / paycheck stubs
- 1099s or other records of Social Security income, dividends & interest, capital gains, business income, rental income and some retirement income[2]
- Clients: please note that Form 1099s and tax documents are available from Fidelity. You should have received an email dated 2/12/24 from Fidelity with a link to the documents, or alternatively please navigate to the Fidelity website or browser, hit the “Accounts and Trade” button, and scroll down and click “Tax Forms and Information”. You’ll be able to download the tax forms you need to provide to your CPA.
- Deduction & credit documentation:
- Many taxpayers take the standard deduction, however records for deductible expenses, including childcare, home mortgage/property tax/sale records, donations to charity and donor-advised funds, HSAs & healthcare expenses, retirement contributions, and education expenses, are important to retain and provide to your CPA
- Credits reduce the amount of tax owed, and can include credits for clean vehicle and home energy purchases, higher education credits and parent/caretaker credits
- Note Roth IRA contributions are not deductible
- Income documentation:
- Tax brackets have been inflation-adjusted. For 2023, married couples filing jointly incur the top 37% tax rate on taxable income of more than $693,750 (an increase vs 2022) and single filers $578,125[3]. Net investment income tax and alternative minimum income tax may add meaningfully to an overall tax bill – be sure to discuss with your CPA if this applies to your situation and how to limit your tax liability
- Review all materials well in advance of the tax deadline with your CPA
Reminders for 2024:
- Adjust 401K contributions for 2024. New contribution limits for 2024 are $23,000 and $30,500 for those 50 and older
- Adjust HSA contributions for 2024 if necessary. 2024 contribution limits are $4,150 for self-only coverage and $8,300 for family coverage. Those 55 and older can contribute an additional $1,000.
- IRA contribution limits increase to $7,000 and $8,000 for those 50 and older
Future potential changes to be aware of:
- Gift and Estate Tax Exemption – Expanded Exemption Set to Expire at the end of 2025: the exemption for gift and estate tax was expanded meaningfully in 2017. In 2022, the lifetime exemption for gift and estate taxes was $12.06mm per individual or $24.12mm per married couple. The expanded exemption is set to lapse in 2025 unless it is extended.
Use of any information presented is for general information only and does not represent individualized tax advice, either express or implied. You are encouraged to seek professional tax advice for questions and assistance.
[1] https://www.irs.gov/filing/gather-your-documents
[2] https://www.irs.gov/e-file-providers/definition-of-adjusted-gross-income
[3] https://www.wsj.com/personal-finance/taxes/tax-returns-checklist-c0ae2d3b?mod=Searchresults_pos17&page=1
This communication is for informational purposes only. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested.