Start Preparing for Tax Day

Now that the election cycle has come to a close, we are just weeks away from the holiday season and the end of 2024. Before you get totally immersed in holiday planning and decorating, try to take some time to get a jump on your 2024 tax filing. Here are some tips that may help you decrease your tax liability and keep more money in your pocket. Of course, be sure to consult your tax specialist for the best advice.

First, review your deductions and determine if there is room for you to maximize them. The standard deduction is a blanket amount that you can subtract from your adjusted gross income without having to prove anything to the IRS. For 2024 the standard deduction for those that are single filers is $14,600, which is also the standard deduction for those that are married and file separately. If you are married and file jointly, the 2024 standard deduction is $29,200, and the standard deduction for heads of households is $21,900. There may be times when the standard deduction is not the best choice. Taxpayers may benefit from itemizing eligible deductions when the itemized deductions exceed the amount of the standard deduction. Potentially eligible itemized deductions include mortgage interest, medical expenses, charitable donations, and certain business expenses.

If you have determined that your itemized deductions are close to or exceed the standard deduction, consider increasing your charitable deductions by the end of the year. You may do this by helping loved ones with a tax-free gift or donating to your church. For 2024, the annual gift tax exclusion is $18,000, meaning a person can give up to $18,000 to as many people as he or she wants without having to pay any taxes on the gifts. If you choose to donate to your church, be sure that you have the required documentation to verify your gifts on file.

Making time to review your tax deductions prior to the end of the year is an important step on your journey to financial freedom.