Kelly Bullis
Wow! 2024 is almost over! Somewhere in the back of my brain, I’m wondering how that happened. This year has been a blur and now we are facing the last chance to do anything to save tax we will owe for 2024. Here are some basic thoughts for you to consider.
Tax brackets and standard deductions are indexed for inflation. If you have the exact same taxable income as 2023, your tax will be less because of these two items.
You can make total estate-related gifts of $18,000 in 2024 to any individual and NOT have to file a gift tax return.
You have until April 15 to max out your IRA contributions – $7,000, $8,000 if you are 50 or over. 401(k) contributions can be $23,000, $30,500 if you’re 50 or older. For 401(k) contributions though, you must have made them by Dec. 31. (Your employer can do matching contributions as far as the filing deadline for the employer’s business tax return.)
If you itemize, you still have time to make deductible charitable gifts. If you put the gift in the mail by Dec. 31, you can count the gift as 2024. Beware though. Your charity end of year giving statement may not include that last-minute gift, so keep good records to support the deduction.
If you normally pay your property taxes (as opposed to the bank doing it through escrow), you could pay the upcoming 2025 taxes by December 2024 and get a deduction in 2024. Beware of the SALT $10,000 maximum tax deduction limitation.
If you were thinking about purchasing a “clean vehicle” (electric vehicles, including certain hybrids) in the next several months, you could accelerate that to complete the purchase by Dec. 31 to get the potential $7,500 tax credit. (Of course there are modified adjusted gross income limitations – $300,000 for marrieds, $150,000 for singles.) The selling dealership should provide you with a statement of what potential credit is available on their cars. (There are all kinds of limits. Maximum sales price, gross vehicle weight, battery capacity, etc.) The credit is not refundable.
Same goes for solar panel/battery backup systems for your home. It might not be possible with weather and time limitations, but you never know until you try. The potential credit is 30% of what you pay. The credit is not refundable.
If you have some stocks you own that have lost value and you want to switch to other stocks as well as some stocks that may have hit their potential high mark, you could sell off both, mostly offset the losses against the gains, and buy some better stocks to go into the new year. Net tax impact could be zero if you and your broker work together on this.
Have you heard? Proverbs 21:5 says, “The plans of the diligent surely lead to profit; and everyone who is hasty surely rushes to poverty.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com. Also on Facebook.