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Master Your Finances: 5 Tax Tips You Can’t Afford To Miss From Local CPAs
Article Categories: Articles
Article Tags: Financial Education
Posted on Thursday, February 15, 2024
tax tips from western state bank

We’ve received several inquiries regarding reporting CD interest on this year's taxes. In most cases, you need not worry about reporting interest earned on Certificates of Deposit (CDs) until the CD matures. If your CD did not reach maturity in 2023, chances are you will not have any reporting obligations for this year's taxes. Of course, exceptions do exist, so we urge you to consult with your tax professional for personalized guidance.

To further assist our customers on tax planning, we reached out to local, western-Kansas based Certified Public Accountants (CPAs) for additional tax tips and advice. We hope their insights help you make informed decisions and foster a financially secure future.

1. Last-Minute Tax Magic: Lowering Your Bill or Boosting Your Refund

If you're scrambling to file your 2023 tax return, don't panic. You still have time to deploy tactics that may help you save. Jennifer Mongeau of Jennifer Mongeau CPA LLC, suggests making a deductible contribution to a traditional IRA before April 15, 2024, to see immediate tax savings on your 2023 return. Explore options like the increased contribution limit of $6,500 (or $7,500 if you're 50 or older) for eligible taxpayers.

And while many crave a sizable tax refund, Ron Schneweis of Schneweis Tax & Accounting points out that it’s your money tied up all year. You can always adjust your withholding to potentially receive more substantial paychecks throughout the year. He recommends striking the right balance between a steady income and a lump sum refund.

2. Business Owners: Extensions May Be Your Ally

Lewis, Hooper & Dick, LLC (LHD) CPA Steven Josserand warns businesses who purchased property and equipment including machinery, vehicles, computers and office furniture in 2023 to be cautious about filing taxes too soon. Through the Bonus Depreciation incentive, businesses are allowed to deduct a large percentage of the cost of eligible purchases during the same year the purchases were made. For 2023, the bonus depreciation amount is 80%, and is set to decrease by 20% each year until it reaches 0%. However, current legislation in the Senate proposes a retroactive shift from an 80% to 100% bonus depreciation for 2023. Josserand recommends exercising caution when filing early as the rules could change after you file. LHD expects to file extensions for many business returns until this is fully addressed

3. Navigate Employee Travel Deductions with Finesse

Under the Tax Cuts and Jobs Act, employees face limitations on deducting unreimbursed travel expenses through 2025. However, CPA Jennifer Mongeau points out that self-employed individuals can continue to deduct business expenses, including travel. It's a delicate dance, but understanding the rules can help you make the most of your deductions.

4. Business Owners, Rejoice: QBI Deductions

Mongeau reminds business owners that Qualified Business Income (QBI) deductions can be a game-changer. Authorized by the Tax Cuts and Jobs Act (TCJA), this deduction allows a 20% reduction of QBI, offering a substantial benefit. Keep an eye on it, though—it's scheduled to expire after 2025 unless Congress extends it.

5. Fortify Your Defense: Secure Your IRS Account

In this era of advancing technology, it's crucial to fortify your financial defenses. According to Lewis, Hooper & Dick, LLC (LHD) CPA Steven Josserand, taxpayers can now create an account on the IRS website and use their accounts to validate IRS communications. To add another layer of protection, the IRS also offers an Identity Protection PIN. In the age of AI, staying one step ahead is crucial to financial security.

For additional tips and clarification on any of the above statements, please contact your accountant. 


Article Categories: Articles
Article Tags: Financial Education