Filing taxes may seem like an intimidating task, nevertheless with the right guidance and resources it can become an easy process. Going into 2024 justifies that you understand the new tax regulations to see the impact on your filing. Whether you are an individual or a business owner in and around the Bronx, taxes in 2024 demand some careful planning with plenty of attention to detail.
To avoid running off the track from the very first step, you must keep track of important dates and deadlines during tax season. Mark your calendars for the following:
The 1040 form is the main document that individuals use for filing their yearly income tax returns to the IRS. It includes all your sources of income, deductions, and credits and explains your overall financial situation for the tax year.
The W-2 form reports employee wages received and the taxes withheld from their paychecks by their employers. Meanwhile, Form 1099 is to report different types of income, which include earning from freelance, interest, dividend, and others.
Get all income statement that you have across the year.This includes:
If you are an employee, your employer will be required to supply you with a Form W-2 which contains all the information regarding the taxes withheld, earnings and other relevant data.
If you are self-employed or received money for freelance work, investments or other sources, you should have a Form 1099 detailing these earnings.
Account for any extra income that may not be reported on your pay stub by including statements of rent, interest, and dividend income (1099-INT, 1099-DIV).
Now, collect the receipts of deductible expenses that you acquired during the year.These may include:
Hold the receipts and invoices for eligible expenses like medical bills, charitable contributions, business expenses, and educational expenses.
In case that you use a vehicle for business purposes, keep mileage logs to provide the proof for your mileage deductions.
Collect your documents reflecting property taxes paid for the year if you are a homeowner or proprietor.
Obtain statements from investment accounts which would include any deductible investment expenses or losses.
Use the information from your previous years tax return and check the consistency. Pay attention to:
Among others, include any open items from the previous year, such as capital losses, charitable contributions, or business losses, that may affect your current year’s tax return.
If your financial situation has been different from last year, enter any new sources of income, additional deductions or credits, or other relevant changes.
Consider using tax preparation software or the help of an experienced Tax Professional to simplify the process and avoid errors. Benefits of using tax software or Tax Accountant include:
Our tax professionals will guide you at each step of filing tax, helping you to identify possible deductions and credits.
Tax preparation products and tax professionals can find omissions or inaccuracies in your tax return before filing and thereby avoid the possibility of audits or penalties.
Tax software and tax professionals are able to help identify the missed deductions and credits, and so you can get higher return or pay less tax.
Planning strategically is what will make a difference for you to deduct and claim as many credits as possible to pay less tax.Here are some actionable tips to help you make the most of available tax breaks:
Deductible expenses are itemized which can substantially lower your taxable income, if your total itemized deductions are more than the standard deduction.Consider the following deductible expenses:
Keep a record of the actual out-of-pocket costs for medical services, such as health insurance premiums, prescription medications, and uncovered medical services by insurance.
Subtract from your income state income taxes, property taxes, and other local taxes you have paid over the year.
If you have a home, deduct the interest you pay on your primary dwelling, as well as the interest you pay on a second home, if you have one.
Charitable contributions to qualified organizations are eligible for a deduction. Log cash donations and donations in kind or property.
Tax credits serve to directly reduce the amount of taxes owed, making them very valuable. Explore these tax credits to see if you qualify:
EITC is accessible to the lower- to middle-income individuals and families and it can bring a substantial refund, regardless if you have the taxes or not.
If you are a parent of a dependent under the age of 17, you can claim the Child Tax Credit, which is up to $2,000 per child.
The two Credits–American Opportunity Credit and Lifetime Learning Credit– may help to reduce the costs of higher education, which can be expenditures paid for tuition, fees and textbooks.
You can get tax deductions for making home improvements that are energy efficient, including installing solar panels or energy-efficient windows.
Putting money aside in an IRA or 401(k) not only allows you to save for the future but also gives you an immediate tax benefit.Consider the following options:
The donation to a traditional IRA may be accounted as tax-deductible and deducted from your total taxable income for the year. Mind contribution limits and income eligibility.
Additionally, taxable income can be reduced by contributions to employer-sponsored retirement plans like the 401(k). Utilize the employer matching contributions if provided.
If you are enrolled in a high-deductible health plan, contributions to an HSA are tax-deductible and may be used to pay for qualified medical expenses on a tax-free basis.
When it comes to filing your taxes, you have several options available:
Even though all the necessary preparations have been done, issues may occur during the tax season. Here’s how to address common issues:
Mastering tax season is within reach with the right knowledge and preparation. By understanding key dates, organizing your documents, maximizing deductions and credits, choosing the right filing method, and addressing any challenges that arise, you can navigate tax season with confidence and peace of mind. Remember, we’re here to support you with Tax Accounting, Bookkeeping Services and any other complexity in Filing Your Taxes in 2024. Maximize your tax savings and ensure compliance for filing taxes in 2024 with SCL Tax Services. Contact us today for expert Tax Preparation, Business Taxes and Tax Accounting Services In and Near Bronx.
Is it necessary to hire a tax professional for filing taxes?
Hiring a tax professional is not mandatory, but it can significantly simplify the process and optimize returns.
What types of deductions are available for small business owners?
Small business owners may be eligible for various deductions, including those related to business expenses, home office deductions, and retirement contributions. Consulting with a tax professional can help identify all available deductions.
What steps can individuals take to avoid tax audits?
Maintaining accurate records, reporting income truthfully, and avoiding aggressive tax strategies can reduce the likelihood of tax audits.
How often should I update my bookkeeping records?
Regularly updating your bookkeeping records is essential for accurate financial reporting and tax compliance. Aim to reconcile accounts monthly and review financial statements quarterly to ensure accuracy and identify any discrepancies promptly.
What should I do if I can’t pay my taxes on time?
If you’re unable to pay your taxes in full by the deadline, you should still file your return on time to avoid penalties. Then, explore options such as setting up a payment plan with the IRS or applying for an extension to pay.
We are here to relieve you of the tax pressure by offering a wide range of Tax Services In & Near Bronx, NY. If you need expert advice or need us to complete your taxes, we will provide it for you. We know you work hard, so we work hard to serve your needs.
Your time is valuable, which is why we are here for you.