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Labor Day and Year End Tax and Financial Planning
August 2024 Dear Valued Client and Friend,
School is back, football is in the air and yes we are approaching another tax season. Sorry! Please take this time to enjoy the Labor Day Holiday, in this the greatest of all countries. Please take a look at our new and improved website at chuckandersonaccounting.com. We have expanded our services but eliminated others. LISTED BELOW ARE ADDITIONAL THOUGHTS ON PLANNING FOR THE 2024 TAX SEASON. MORE CHANGES ARE IN THE WORKS. LET NO MAN RELAX AS CONGRESS IS IN SESSION. ALSO KEEP IN MIND THAT THERE IS NO CRYING DURING THE TAX SEASON. OBSERVATIONS AND SUGGESTIONS: While most taxpayers in the country receive refunds, many of us do not. Some of us receive tax bills that were not expected when we file. As of Mid May, nearly $270 billion in refunds went to taxpayers with the average refund being just under $2,900. Taxes can go up if we changed jobs, were involved in a gig business, side hustle or there were no withholdings on earned income. Be careful if you receive payments in cash. Remember that our federal tax system is: pay as you go. 1. Make sure you check on your withholdings. If not enough, then make changes with your employer. 2. If not enough, you can also make estimated quarterly payments in September or by the end of December. The IRS has a handy Estimator to calculate your estimated taxes. Go to IRS.gov If you are scheduled to make estimated tax payments for 2024 make sure you make them on time. If you need to make changes or are unsure of something, please contact us for assistance. Make sure you keep track of what tax year you are making the payments for. Indicate what year on the check and put your social security number on the check. Tax returns with extensions are due October 15th, the taxes to be paid are due April 15th whether you have an extension or not. Penalties will occur if you pay after April 15th. You are required to file a reasonable tax return not a perfect tax return. Keep track of your income and expenses while reconciling your bank accounts each month for accuracy. If you do not have a system in place for your accounting, purchase some accounting software to help you. If you own a business you must have a Balance Sheet in addition to your Profit and Loss statement; especially if you are an S corporation or Partnership. If you have a retirement account, try to invest money in this account each month to help reduce your tax liability and save for later in life. Dollar cost averaging is a good way of maximizing your returns. A great way to save on taxes and an excellent social policy is to give both cash and merchandise to charity of your choice. Keep track of the date of donation, what you gave, and its Fair Market Value (FMV). The FMV should not be more than 1/3 of your cost. If brand new, then the full value is deductible. You cannot take a deduction if you don't itemize your deductions; meaning you take the standard deduction amount. FINANCIAL PLANNING 1. If you do not have a Trust, consider setting one up. Especially if you are over 50 years old. A trust is a contract and will help prevent the state from spending/allocating your hard earned wealth. 2. Invest in a college savings plan for your children or grandchildren if you have the funds. 3. Contact us if you need term or whole life insurance. Annuities are a good way to save that extra income for retirement. 2. We can review poorly performing investments for you. Please make sure you contact us before you make major financial decisions that can affect your wealth. It could save you thousands of dollars! We are here to help you with your planning and questions. Please contact us at 310-374-8832. Thank you for trusting us. Sincerely, Chuck Anderson Chuck Anderson, C.P.A., Inc. [email protected] |
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