Only 12 Days Left for 2024 Tax Deductions.

Highlights from the article:

• You may still take steps to lower your 2024 tax burden.
• Such activities must be done prior to the end of 2024.
• Deductible credit card costs are deductible in the year they are incurred.
• College tuition Business expenses Harvest Losses at the last minute
• Deductions are itemized.

As the end of the year approaches, please remember that New Year's Eve, December 31, is the final day to make a tax-deductible purchase, pay a tax-deductible cost, make a tax-deductible charitable donation, or pay tax-credit-qualifying tuition or expenses for 2024.

That's just 12 days away. Although many companies, nonprofit organizations, and government offices will be closed for the New Year's holiday, there is still time to make charitable gifts and pay deductible taxes before then. However, don't be shocked if several places shut earlier than the 31st to enjoy a long weekend, reducing your time to act even more.

College Tuition

whether you have a kid in college, you may discover whether you paid at least $4,000 in tuition and qualifying costs for that student in 2024. If not, you may prepay for the first three months of the next year's tuition and apply the money to your 2024 tuition credit. However, before you do so, please contact our office to ensure that this plan is advantageous to you depending on your tuition and income level.

Business Expenses

If you own a small company and make a business purchase before the end of the year, you may often expense (write off) the whole amount. However, before company acquisition expenditures may be deducted, they must be put into operation. As a result, if you accept delivery after the end of the year, you will not get a deduction on your 2024 return--even if you paid for the item in 2024.

Harvest Last Minute Losses

If you have an overall capital gain for the year, you can consult with your broker or conduct your own review of your portfolio to identify losers that you can sell before the end of the year to offset your gains; you may even end up with a net $3,000 loss that is tax deductible. Of course, these transactions must be completed before the end of the year.

Itemized Deductions

To be eligible, itemized deductions must exceed the standard deduction for your filing status.

Itemized deductions are separated into five types of expenses: medical, taxes, interest, charitable donations, and miscellaneous, some of which provide last-minute deduction options. If your itemized deductions are just slightly greater than the standard deduction, bunching may assist push them over the line, making itemization more advantageous.

Paying for last-minute medical expenditures may be a savvy move to raise your itemized deductions, particularly if you're on the verge of exceeding the standard deduction threshold. This practice, known as "bunching," entails scheduling medical expenses to maximize deductions in a given tax year.

Medical costs must exceed 7.5% of your adjusted gross income (AGI) to be considered deductible. This implies that only the percentage of your medical costs that exceeds the 7.5% limit is deductible. As a result, it is critical to assess your AGI and establish how much medical costs are required to exceed this level. If you expect to have large medical expenditures, paying them all in the same tax year might help you surpass this limit and maximize your deductible.

For example, if you have anticipated medical treatments or costs, such as dental work or prescription purchases, you may consider deferring these payments until the current tax year. This is especially useful if you anticipate that your income will increase in the next year, raising the 7.5% level relative to your income.

However, it is critical to assess the advantages of this technique against your cash flow and financial circumstances.

Taxes - You may be able to save money by prepaying your home's property taxes before the end of the year. If you pay anticipated state taxes, you may make your fourth quarter payment before the end of the year. CAUTION: The maximum amount of deductions for this tax category is $10,000.

Charitable Contributions - Charitable contributions to qualifying organizations are deemed made at the moment of unconditional delivery; for checks, this is the day the check was sent. If you utilize a pay-by-phone or online account, the financial institution will pay you on the day you made the donation.

If you are low on cash, bear in mind that any purchases or donations charged to your credit card are considered purchases at the time of charge.

If you have any more queries, please contact our office. We wish you a Happy New Year and look forward to helping you with your tax preparation requirements over the next tax season!