Stay Ahead of the Curve: Important Tax Deadlines and Tips
Authored by: Kyle Meissner, CPA, Financial Advisor & Member at Cordell, Neher & Company, PLLC
It’s that time of the year again – tax season is upon us. With the deadline for filing personal income tax returns swiftly approaching on April 15th, it’s crucial to ensure you’re prepared and organized. Here’s a comprehensive guide to help you navigate through the upcoming deadlines and optimize your tax strategy:
Deadline Reminder: April 15th for Personal Income Tax Returns
As a friendly reminder, personal income tax returns for the year 2023 are due on April 15, 2024. However, if you find yourself needing more time to gather necessary documents or review your finances, you can request a six-month extension, allowing you to file your return by October 15, 2024. Remember that this is an extension of time to file your return, but not an extension to pay your tax due. You need to estimate your tax due with your return and pay by April 15th to avoid penalties. Your first 2024 quarterly estimated tax payment is also due April 15 (if required). If you are filing an extension, you may want to combine your first 2024 estimated payment with your extension payment.
Payment Methods
The IRS provides a convenient online platform, Direct Pay, on irs.gov for making secure and efficient payments. When using this system, remember to record payments under the name and Social Security Number of the primary taxpayer listed.
Setting Up Payment Plans
For balances exceeding $50,000, use Form 9465 to set up a payment plan with the IRS. However, if the balance is less than $50,000, you can easily initiate the process online.
Last-Minute Deductions for 2023
If you find yourself owing taxes for the previous year, there are still strategic moves you can make to reduce your tax liability.
- IRA Deductions: Consider making a tax-deductible contribution to an Individual Retirement Account (IRA). Individuals under 50 can contribute up to $6,500, while those aged 50 and over can contribute up to $7,500. Be sure to check eligibility criteria based on your earned income.
- Self-Employed Contributions: Self-employed individuals have the opportunity to contribute significantly to retirement savings. Contributions of up to $66,000 can be made to a SEP IRA, while SIMPLE IRA contributions can reach $15,500. Consult with your advisor or CPA to determine your exact eligibility.
- Health Savings Account (HSA): If you participate in a high-deductible health insurance plan, explore the option of making HSA contributions. Limits for 2023 are $3,850 for self-only plans and $7,750 for family plans, with an additional $1,000 “catch-up” allowed for taxpayers aged 55 and over.
- Adjusting Withholding and Estimated Payments: For those facing tax obligations, it’s prudent to adjust withholding with your employer or make additional estimated tax payments for the upcoming year. Use the IRS Tax Withholding Estimator and consider completing a new W-4 form to align your payments with your financial situation.
As the tax deadline approaches, a proactive approach to tax planning can make a substantial difference in your financial well-being. By understanding tax extensions, maximizing deductions and adjusting your financial strategies for the future, you can be more prepared going into this tax season. For more information, visit our website at cnccpa.com or give us a call at (509) 663-1661, and we’ll begin helping you, your family or your business today.
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