Fill up your 2024 IRA
If you forgot or didn’t have the resources to contribute the maximum amount to your IRA or Roth IRA plan in 2024, there’s still time! Eligible participants have until April 15, 2025, to contribute as much as $7,000 to these retirement accounts ($8,000 if you’re age 50 or older) for the 2024 tax year. Making contributions can lower your 2024 tax bill. Just remember to correctly designate the year for which you’re contributing. And, of course, if you’ve already contributed the 2024 maximum, you can make contributions for the 2025 tax year.
Filing status and an important deduction
Most married couples file joint income tax returns. But in some cases, it may be beneficial to file separate returns. If, for example, one spouse has substantial unreimbursed medical expenses and relatively low income, filing separately could allow the spouse to claim the medical expense deduction. Or if a spouse has qualified business income (QBI) from a sole proprietorship or pass-through entity, filing a separate return might enable the taxpayer to claim a higher QBI deduction. On the other hand, separate filers can’t claim certain education credits, child and dependent care credits, or student loan interest deductions. We’ll determine the right filing option when we prepare your return.
A mystery package
Did you receive an unexpected package with no sender listed? If so, the Federal Trade Commission (FTC) urges caution. Scammers are relentless in finding new ways to steal your assets and personal information. Tax season may incentivize them even more. If thieves snag your data, they may file a fraudulent tax return in your name to claim a false refund. At the very least, that can delay your legitimate filing. Beware if you receive an unexpected package without a sender identified and a note instructing you to scan a QR code for details. Scanning it may lead to a phishing website that steals your data and may install malware on your device. For more from the FTC click here.
New hope for some disaster victims
There’s good news for taxpayers who suffered casualty losses from disasters during earlier periods. Typically, losses can only be claimed when itemizing deductions on a tax return. However, the Federal Disaster Tax Act, signed by then-President Biden on Dec. 12, 2024, changed that. It allows eligible taxpayers to deduct personal casualty losses without itemizing if a presidentially declared disaster occurred between Dec. 28, 2019, and Dec. 12, 2024. The law also made other changes to casualty deductions during this period.
Eligible taxpayers may be able to file amended returns for past years and receive refunds. The relief doesn’t apply to disasters after Dec. 12, 2024. Contact us for help.
Taxpayers Have Rights
The IRS’s Taxpayer Bill of Rights represents 10 fundamental rights to which taxpayers are entitled when interacting with federal tax authorities. One of these is the right to confidentiality. Any information provided to the IRS can’t be disclosed to third parties unless the taxpayer requests it or the law requires it. If IRS employees or others privy to tax information wrongfully use or disclose it, they’re subject to legal action. The Bill of Rights also includes the right to privacy, which means that IRS inquiries, examinations or enforcement actions must comply with the law and be no more intrusive than necessary. Click here to view the full Taxpayer Bill of Rights.