With just a few months left in 2024, it’s the perfect time for a financial health check-in. Taking proactive steps now can set you up for success and help maximize your refund for the next tax season. Here are some simple yet effective strategies to help you get the most out of your taxes.
1. Adjust Your W-4 Withholding Allowances
If you owed money last tax season, it’s time to review and adjust your tax withholding from your paycheck. Updating your W-4 form based on your current financial situation can increase your income tax withholding, which could prevent a tax bill in the spring. While this might mean a slightly lower paycheck now, it can result in owing less—or nothing at all—when you file your taxes. You might even receive a refund instead.
On the other hand, if you received a large refund last year but prefer to have that money throughout the year, adjusting your W-4 form can help increase your take-home pay by reducing the amount withheld from each paycheck. Simply use a withholding calculator to determine the right number of allowances, fill out an updated W-4 form, and submit it to your employer. The changes will reflect on your next paycheck.
2. Keep Track of Tax Deductions
Organizing your financial documents throughout the year ensures you don’t miss out on any valuable deductions come tax time. Create a file labeled “Current Tax Info” and keep it handy. Anytime you come across a deductible expense—such as medical receipts, charitable donations, or educational expenses—place it in the file.
Knowing which tax deductions you’re eligible for under the current tax law can save you money. Emerald Services can assist you in identifying and claiming all eligible deductions when you file your tax return. If you’re self-employed, consider using accounting software like QuickBooks Self-Employed to track your income, expenses, mileage, and receipts year-round. This information can then be easily exported to your tax return, streamlining the process.
3. Save for the Future
It’s never too early or too late to start planning for retirement. If you haven’t begun saving, now is a great time to start. Here are some tips to help you reach your retirement goals:
- Maximize 401(k) Contributions: For 2024, you can contribute up to $23,000 to your 401(k) retirement account. If you’re 50 or older, you can make catch-up contributions up to $7,500, bringing your total contribution to $30,500.
- Utilize SEP IRA for the Self-Employed: If you’re self-employed, you can contribute up to 25% of your net earnings, with a maximum contribution of $69,000 for 2024. Contributions can be deductible as a business expense, reducing your taxable income.
- Take Advantage of the Saver’s Credit: If you’re a low-to-moderate income taxpayer, you may qualify for the Saver’s Credit, worth up to $1,000 ($2,000 if married filing jointly). This credit is given just for contributing to your retirement and can reduce your taxes dollar-for-dollar.
4. Learn Something New
Whether you’re looking to advance in your current career, change fields, or simply expand your knowledge, investing in education can also provide tax benefits. If your income is moderate, you may be eligible for the Lifetime Learning Credit. This credit allows you to claim 20% of your tuition expenses, up to $2,000 per tax return, for courses taken at an eligible educational institution. You don’t have to be pursuing a degree to qualify; any class taken at the college level can make you eligible for the credit.
5. Clean Out Your Closets and Donate to Charity
Decluttering your home not only creates more space but can also provide valuable tax deductions. You can deduct the fair value of household goods, gently used clothing, shoes, toys, and even furniture that you no longer need. Donations of books and magazines to libraries are also deductible as charitable contributions. Just make sure to get a receipt for any donations made and that you’re able to itemize your deductions. These charitable contributions can help reduce your taxable income.
Get More Out of Your Taxes with Emerald Services
By following these simple tips, you can get more money back and boost your next tax refund. And don’t worry about knowing all the tax rules. No matter what changes you’ve made this year, Emerald Services is here to help you maximize your tax return. Whether you choose to file your taxes yourself or work with an Emerald Services expert, we’ll ensure you get every dollar you deserve and the biggest possible refund—guaranteed.
Take control of your financial future today and make the most of the rest of 2024. With a little planning and the right guidance, you can set yourself up for success this tax season and beyond.
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