9 Savvy Tax Tips for 2024
by: Ashley Madden, CFP®, CPA, CEPA
As the fiscal landscape continues to evolve, so do the opportunities for those seeking to optimize their wealth management strategies. These 9 Savvy Tax Tips from Ashley, can be used as a guide crafted with the financial considerations of the affluent in mind.
We understand that your financial landscape demands sophisticated strategies, and we’re here to deliver insights beyond the conventional. From maximizing tax-efficient investments to navigating complex regulations, our team’s goal is to help you preserve and grow your wealth intelligently.
Join us as we delve into the intricacies of advanced tax planning, providing you with insights and strategies to optimize your tax position. Whether you’re a high-net-worth individual seeking to protect your assets or an ultra-high-net-worth individual looking for unparalleled financial growth, these 9 Savvy Tax Tips are the gateway to elevated financial success in 2024.
9 Savvy Tax Tips
1. Track your tax withholding and estimated tax payments for the year, considering all income sources including sales of real property and capital gains/losses.
2. Track your cost basis and transactions if you participate in virtual currency trades. Remember that you must report that you are holding virtual currency on your tax return even if you do not trade in a given year. Gains or losses from virtual current trades are reported on Schedule D of your tax return annually.
3. Consider “bunching” itemized deductions (such as charitable donations and property taxes) every other year or two. Medical donations only start to qualify for itemizing at 7.5% of your Adjusted Gross Income, and you are limited to $10K in state and local tax payments, including real estate taxes and income taxes.
4. Maximize funding to retirement accounts (401(k), IRAs) from earned income, including self-employment income. Evaluate if you qualify to fund a Roth IRA and if this benefits you.
5. Self-employment income must be reported over $400. Have good recordkeeping for business deductions and consider funding an IRA, Roth IRA or SEP-IRA retirement account based on your self-employment earnings.
6. Required Minimum Distributions (RMDs) from IRA accounts must be taken by age 73 for individuals turning 72 on or after January 1, 2023. Those 70 ½ and older may consider making direct “Qualified Charitable Distributions” (QCDs) to reduce the taxable burden of IRA distributions. The penalty for not taking RMDs is 25% of the RMD or 10% if taken within two years with a corrected tax return.
7. Consider Roth Conversions in years when you pay less income tax. Withdrawals for those over age 59 ½ are tax-free and not subject to RMDs if you have had your Roth account for five years or more.
8. Consider gifting opportunities (including low-cost basis stock) up to gift tax exclusion limits. The gifting annual exclusion limit for 2024 has risen to $18,000 per donor per donee. Gifts over the annual exclusion require a gift tax return filing to report the gift.
9. Track your cost basis and transactions if you participate in virtual currency trades. Remember you must report you are holding virtual currency on your tax return even if you do not trade in a given year. Gains or losses from virtual current trades are reported on Schedule D of your tax return annually.
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