Maximizing Our Potential — Protect and Embrace It

Women's History Month. Vector banner, poster, flyer, greeting card for social media with the text Women s History Month, march. Beautiful bouquet of flowers on blue background. Concept for women

“Don’t destroy it, protect it, embrace it”— Al Pacino in Scent of a Woman.

{6 minutes to read} We are now on the final stretch of the first leg of the 2024 tax season. Before I get into tax talks, let us pause to reflect on the societal contributions made by women throughout history. 

March is Women’s History Month. With the month coming to a close, I find myself reflecting on a feed from Senator Cory Booker about Dr. Mary Walker, the only female Recipient of the Medal of Honor. In describing her, Booker uses words like courage and service, brilliance and resilience. He notes her defiance and enduring legacy. This was the first time I had heard about her, and her message hit a few chords. You can learn more about her here.

I often wonder — if we lived in a world where men and women were allowed equitable partnership in all sectors of society, would our human experiences be more enriched and worthy of honor? Consider empowering her uniqueness.

“Don’t destroy it, protect it, embrace it.” This quote is from the movie Scent of a Woman starring Al Pacino, who plays a blind, retired Lieutenant Colonel who hires a young guardian, Charlie, played by Chris O’Donnell. In the scene that includes the words above, Pacino’s character pleads to the decision-makers gathered for a hearing to decide the”… fate — which is to expel an impoverished student from the university — because he took an unconventional stand — after some happenings on campus.”

Regardless of society’s views on women, I take solace in knowing that our Creator’s infinite wisdom is personified as a woman. Check out the Book of Proverbs. Celebrate the women in your lives in a unique way.

Let’s get back to tax talk –

We are deep into the tax season, so it is like a breath of fresh air to share some information with you.

First — Planning ought to be an integral part of tax compliance. It may be worth your time to remember that tax preparation is historical, and as such, “trying to fix the past” is not always possible. On the other hand, tax planning allows us room to navigate certain tax strategies for a better future outcome. Consider planning ahead for 2024.

Second — for those who generally file an extension, please keep in mind that the extension grants you time to file the tax return, not time to pay any taxes owed. When the extension is filed, the tax agencies require payment of the taxes. Additionally, any balance not paid will incur penalty and interest. The IRS interest rate has doubled — until June 2022 it was 4% — it is now 8% (as of the date of this article).  

How will I know how much I owe if the returns are not yet completed? Great question. Most tax agencies expect a payment in the amount of what you owe on your last return. Use last year’s (i.e., 2022) actual as an estimate for 2023, providing all remains equal.

Next 2024 there are many tax changes in 2024. One of the most notable is in retirement savings. Here are a few changes made under the SECURE 2.0 Act of 2022:

SECURE 2.0 Act Summary: New Retirement Plan Rules for 401(k), Roth, More | Kiplinger

  • RMDs — Roth IRA savers are no longer required to conform to the required minimum distributions rule (RMD).
  • No 10% penalty. Some individuals under 59 ½ can withdraw retirement money without incurring the 10% early withdrawal penalty.
  • When specific criteria are met, 529 Plan education savings can be rolled over into a Retirement Savings account.
  •  Student loan relief can be offered via employer 401(k) matching plans.

Other changes that matter:

  • Small business — a 20% deduction of your QBI is still on the table. Plan wisely since it sunsets soon.
  • Business tax credit — check out the list on the IRS website for Individuals — see earlier news articles and check out our blog page here.
  • Social Security earnings have increased to $168,600, meaning more of your earned income will be taxed. Looking back to 2019, this is a 27% increase. In 2019, up to $132,900 of income would incur this tax.
  • Standard Deduction for individuals increased to $14,600/$29,200 and $21,900 for single, married filing joint and head of household, respectively.
  • States and local taxes have been creeping up — check out your state in the Tax Foundation link.

In summary, as we reach the end of the first quarter of 2024, let us resolve to plan – please reach out if you need our service to navigate the tax journey. We can share some tools for you to pack.

In closing whether we are male or female, our overall well-being is important to thriving as a person, and contributing to the larger society, so let us not neglect our foundation, which is our spiritual well-being — whatever spirituality means to you. For those who celebrate Easter — in the spirit of grace and truth, let this one be one of sincere and deep reflection.

Thank you for reading. I hope something resonates with you. 

In the spirit of peace,

Nadine Riley, CPA
Founder, Masterpiece Accounting Group
Phone: (212) 966-9301

The Masterpiece Accounting Group web, blogs, and articles are not rendering legal, accounting, or other professional advice. Tax strategies and techniques depend on your specific facts and circumstances. You should implement the information in this newsletter only with the advice of your tax and legal advisors.