It's time to think about your withholding for the rest of 2024
With the tax filing deadline passed, you may be taking a breath and hoping to forget about taxes for now. Before you do, take some time to ensure your 2024 withholding amount is correct so you can avoid problems when you file your 2024 tax return.
If you're an employee who ended up with a surprise tax bill for 2023, and possibly penalties, you can give your employer a new Form W-4 to have more tax withheld this year. If you got a hefty tax refund, you may be smiling. But instead of letting Uncle Sam keep your money for a year, you can lower your tax withholding and raise your regular take-home pay. However, that will also lower any refund next year.
The IRS has a Tax Withholding Estimator tool to help you arrive at the right number. Click here to learn more.
Don't donate to a charity until you check it out
Charitably inclined individuals should be aware of groups that are masquerading as charitable organizations to attract donations. This is true all year long, but especially after a disaster when they hope to play on your sympathy. The fraudsters use fake charities as cover to not only obtain money, but also gather sensitive personal and financial information that can be exploited for tax-related identity fraud. When taxpayers contribute to an organization, they may qualify for a tax deduction, but only if they itemize their deductions.
To qualify for a deduction, the charity must be an IRS-recognized tax-exempt organization. Donors should check the IRS's Tax Exempt Organization Search online tool to ensure the legitimacy of a charity. For more details, click here.
Tax points that new parents should know
Did you or someone you know become a parent this year? If so, be aware that parents have special tax situations and benefits that may lower their tax bills and increase potential refunds. To claim parental tax breaks, your child must have a Taxpayer Identification Number (such as a Social Security number) to confirm the child's birth.
You may want to adjust your withholding to receive more of your money in your paycheck. There are several tax breaks that parents with dependents may qualify for, including the Child Tax Credit, the Child and Dependent Care Credit, the Adoption Credit and more. Click here for more information.
New guidance concerning home energy rebates
The IRS has issued guidance that addresses the tax treatment of rebates received for purchasing energy efficient property and improvements. Generally, individuals who receive the rebates aren't required to include their value as income on their federal tax returns. However, they must reduce the basis of the property by the amount of the rebate when they sell the home. Specifically, Announcement 2024-19 provides that amounts received from the U.S. Dept. of Energy's Home Energy Rebates programs funded through the Inflation Reduction Act will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects. Contact us for more information.
Need to amend a tax return?
Did you submit a tax return and then realize, you'd made a mistake? Perhaps pieces of information were forgotten. Now you may be wondering if you need to file an amended return. The IRS states that taxpayers usually don't need to file amended returns for certain issues.
The tax agency will correct any math errors while processing tax returns and notify the taxpayers. If a form or schedule is missing, they'll send a letter requesting it. Certain other changes, however, require that an amended return be filed. They include: a change of filing status, missing income, incorrect deductions or credits, and inaccurate tax liability. Contact us at 330-453-7633 for help.
