TEXARKANA MAGAZINE
small business finances and complex investments. A local tax expert can offer personalized insights, identify unique tax-saving opportunities, and guide you through year-end planning to maximize your savings. It is essential to stay informed about recent tax law changes, as updates for 2024 may impact your financial strategies. For instance, retirement contribution limits for 401(k) and IRA accounts have been adjusted, so make sure you’re aware of the new caps. Additionally, energy tax credits have been expanded to cover more categories of home improvements, providing greater incentives for energy- efficient upgrades. For specific guidance on how these changes may affect you, consider reaching out to a local tax advisor, and visit IRS.gov for the latest updates and resources. Taking these year-end tax actions can help maximize your savings, reduce your taxable income, and make tax season far less stressful. From retirement contributions to charitable donations, there are ample opportunities to keep more of your hard-earned money. Consult with a tax professional to tailor these strategies to your situation and start the new year with financial confidence.
8. If you have had substantial medical expenses this year, you may be eligible to deduct out-of-pocket costs that exceed a specific percentage of your adjusted gross income (AGI). For instance, if you incurred $10,000 in medical expenses and have an AGI of $50,000, you could deduct expenses above $3,750, resulting in a $6,250 deduction. For a more personalized assessment, consider consulting a local tax advisor who is familiar with medical expense deductions, and refer to IRS guidelines, including Publication 502, for detailed information on eligible expenses. 9. If you expect to be in a lower tax bracket next year, consider deferring year-end income—such as a bonus or a client payment—until January. For example, postponing a $5,000 bonus from December to January could help you stay in a lower tax bracket, potentially saving you hundreds in taxes. For personalized advice on how income deferral may
How the Progressive Tax System Works
In this system, each portion of your income is taxed at the corresponding rate, not your entire income. For example, if you are a single filer earning $120,000, your income would be taxed as follows: • The first $11,000 is taxed at 10%. • The amount from $11,001 to $44,725 is taxed at 12%. • The amount from $44,726 to $100,525 is taxed at 22%. • The portion from $100,526 to $120,000 is taxed at 24%. This system ensures that only the income within each range is taxed at that rate, rather than your total income being taxed at the highest rate for which you qualify. For further details and specific calculations, refer to IRS.gov for updates on federal income tax rates and brackets or speak with a local tax advisor.
impact your tax situation, reach out to a local tax professional.
10. Partnering with a local tax
professional can provide significant advantages, especially when dealing with intricate tax laws or managing
Here’s a breakdown of the U.S. federal income tax brackets for 2024, which use a progressive tax system. This system means that different portions of your income are taxed at different rates. Here are the tax brackets and what they mean for each filing status. 2024 TAX BRACKETS BY FILING STATUS TAX RATE SINGLE FILERS MARRIED FILING JOINTLY MARRIED FILING SEPARATELY HEAD OF HOUSEHOLD 10% $0 to $11,000 $0 to $22,000 $0 to $11,000 $0 to $15,700 12% $11,001 to $44,725 $22,001 to $89,450 $11,001 to $44,725 $15,701 to $59,850 22% $44,726 to $100,525 $89,451 to $201,050 $44,726 to $100,525 $59,851 to $100,500 24% $100,526 to $191,950 $201,051 to $383,900 $100,526 to $191,950 $100,501 to $191,950 32% $191,951 to $418,850 $383,901 to $487,850 $191,951 to $243,775 $191,951 to $418,850 35% $418,851 to $628,300 $487,851 to $628,300 $243,776 to $314,150 $418,851 to $628,300 37% Over $628,300 Over $628,300 Over $314,150 Over $628,300 This article provides general information about year-end tax strategies and is intended for informational purposes only. It does not constitute financial, tax, or legal advice. Tax laws can be complex and vary based on individual circumstances, and recent changes in tax regulations may impact these strategies. For personalized advice tailored to your specific situation, please consult a qualified tax professional or financial advisor. The information provided is accurate as of 2024, but we recommend consulting official IRS publicataions or a local tax expert for the latest updates. Sarah Berry, CPA, PLLC and Texarkana Magazine are not responsible for any actions taken based on the information in this article.
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