Still Relevant — 2024 Tax Year Considerations

tax businessman calculates taxes using calculator laptop

Let your inner light shine brightly –

“Darkness cannot drive out darkness, only light can do that. Hate cannot drive out hate, only love can do that”,

Dr. Martin Luther King, Jr.
Strength to Love, 1963 

The world is indeed a whirlwind of events—from the wars on humanity — to global conflicts — to devastating wildfires—but holding onto hope is a powerful anchor. 

Dr. Martin Luther King, Jr.’s words remind us of the resilience we need — “We must accept finite disappointment, but never lose infinite hope.” Let’s channel our energy into positive (inner) change as the political landscape shifts.

Now, let’s transition to tax talk.

Business Alert: Ongoing litigations — Corporate Transparency Act (“CTA”) — filing compliance is back in effect. The February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) is once again back in effect. The new filing due date is March 21, 2025.

IRS Announces 2025 Tax Season Start Date: January 27, 2025

The IRS announced that the 2025 tax season will begin on January 27, 2025. However, this date may vary by state. Key Considerations for this article:

1. Tax Relief for Major Disaster Areas: Under the SECURE 2.0 Act, eligible taxpayers in disaster areas can withdraw up to $22,000 from an IRA without penalty.

2. Tax Savings for 2024: Ensure you maximize tax savings before filing for 2024.

Tax Relief for Major Disaster Areas

  • Eligibility for Tax Relief:
    • Principal residence in a major disaster area.
    • Economic loss due to displacement, property damage, or lost income.
  • Tax Relief Options:
  • Repay the withdrawn amount over three years.
  • Exemption from 10% early distribution tax.
  • Include distribution of income over three years

For more information, visit the FEMA Disaster Declarations.

Tax Savings Still on the Table for 2024

As we approach tax filing season, individuals, small business owners, and the self-employed must be aware of key tax-saving opportunities. Be sure to consider these options before April 15, 2025, and before filing your 2024 income tax returns.

 For Business Owners and Self-employed Individuals:

  • Employee Retention Credit (ERC):
  • Small businesses can claim the ERC via Form 941 (amended). Ensure you qualify before amending your return.
  • Note: This is a payroll tax credit, typically handled by payroll tax advisors.
  • Home Office Deduction:
  • Deduct the home office expenses for 2024 if you have a dedicated business space.
  • Consider the tax implications if you plan to sell your home.
  • Industry-specific Tax Credits:
  • Small businesses can benefit from various industry-specific tax credits.
  • Visit the IRS Business Credits page for a comprehensive list.
  • SEP-IRA Contributions:
  • Self-employed individuals can fund a SEP-IRA for 2024 by the extended tax return due date.

For Individuals:

  • IRA Contributions:
  • Contribute up to $7,000 to a deductible IRA, considering income restrictions.
  • Health Savings Account (HSA):
  • For single coverage, contribute up to $4,150.
  • For family coverage, contribute up to $8,300, if applicable.
  • Roth IRA for Kids:
  • Fund a 2024 Roth IRA for kids with their earned income.
  • Any contribution helps and starts the 5-year clock for kids.

Bonus Tip:  Consider opening a 529 Plan for yourself, your spouse, child, or grandchild. It can be converted to a tax-free Roth IRA in 15 years if unused. So, start the clock now!

I hope you find this helpful in reducing your tax liability and keeping more of your money. As always, please feel free to contact me for a consultation.

In the spirit of hope, I’m reminded of the words from “The Shawshank Redemption.” when Andy told Red, “Hope is a good thing, maybe the best of things.”

As I conclude, let us remember what endures: ‘Three things will last forever—faith, hope, and love—and the greatest of these is love.’

Thank you for reading.

In the spirit of hope and gratitude,

Nadine Riley, CPA
Founder, Masterpiece Accounting Group
Phone: (212) 966-9301
Email: info@mpagroupllc.com