By Frank Nikischer, MBA
FWN Accounting, LLC
January 29, 2024
The IRS has officially commenced accepting tax returns as of today (January 29), signaling the start of the 2024 tax filing season. This marks the beginning of a critical window for taxpayers to fulfill their obligation of reporting income, claiming deductions, and ensuring compliance with the ever-evolving tax code.
Key Dates and Deadlines
While the official opening of tax filing season is a noteworthy event, taxpayers must be mindful of key dates and deadlines to avoid penalties and ensure a smooth filing process. The traditional deadline for filing federal income tax returns is April 15. However, if this date falls on a weekend or holiday, the deadline is extended to the next business day.
Tax Legislation Updates
Tax laws are subject to change, and each filing season brings potential updates that can impact taxpayers brackets, deductions, and credits. Remaining aware of these changes ensures accurate and compliant filing, potentially impacting one’s tax liability.
Income Documentation and Reporting
Collecting and organizing documentation related to income is a fundamental step in the tax filing process. W-2s, 1099s, and other income-related statements should be carefully reviewed for accuracy. Timely identification and correction of discrepancies are essential to prevent issues with the IRS and ensure an accurate reflection of one’s financial picture.
Deductions and Credits Exploration
Taxpayers are encouraged to explore available deductions and credits to optimize their tax position. From mortgage interest and student loan interest deductions to various tax credits, there are numerous opportunities to reduce taxable income and potentially increase the likelihood of a tax refund.
What’s happening with the Child Tax Credit?
As of today, there is a deal to expand the Child Tax Credit (CTC), which includes the possibility of making some changes retroactive to 2023 – the tax year that people are currently filing for. This deal could provide a more generous refund amount to millions of parents. But….you shouldn’t hold off on filing your taxes in the hopes that Congress will greenlight a more generous Child Tax Credit. If the expanded CTC becomes law and is retroactive to 2023, the IRS will likely send you a check to make up the difference.
Retirement Contributions and Tax Planning
Contributions to retirement accounts not only contribute to financial security but can also impact tax liability. Maximizing contributions to 401(k)s or IRAs can result in valuable tax benefits. This tax season is an opportune time to engage in strategic tax planning, considering future financial goals and optimizing one’s financial portfolio.
Healthcare Coverage Compliance
The Affordable Care Act (ACA) mandates individuals to have minimum essential health coverage. Taxpayers must ensure they comply with these regulations or qualify for exemptions. Those who obtained health coverage through the Health Insurance Marketplace should be prepared with the necessary documentation, such as Form 1095-A, B, or C.
State Tax Considerations
Beyond federal obligations, taxpayers must be cognizant of state-specific tax requirements. Each state operates under its own tax laws, deadlines, and potential deductions or credits. A thorough understanding of state tax considerations is vital for comprehensive and accurate tax filing.
As the IRS opens its doors to tax returns for the 2024 filing season, taxpayers are urged to approach the process with diligence, awareness, and preparation. Using FWN Accounting to prepare and file your tax returns ensures expertise in complex tax codes, maximizes deductions, and minimizes errors. We’ll navigate regulatory changes, provide personal advice, and uncover opportunities for tax savings to yield financial benefits and peace of mind during tax season. Contact Us today for Tax Filing assistance and all your accounting/bookkeeping needs.