Updates
Important Federal Tax Considerations for 2023 & 2024
November 30, 2023
Provided below are some of the important tax issues for 2023 and 2024. After you have reviewed, please don't hesitate to contact your Bowers Tax Professional or email info@bcpllc.com.
2023 Tax Planning
As we approach the end of the 2023 calendar year, it is not too late to strategize to maximize your tax savings. Below are a few key items to consider to reduce your tax burden for 2023:
- For cash-basis taxpayers that elected into the NYS pass-through entity tax (PTET) system, make the final estimated PTET payment prior to 12/31 to get a deduction for Federal income tax purposes in 2023.
- Consider purchasing necessary business equipment in order to maximize the Section 179 deduction for expensing 100% of the eligible cost (subject to limitations).
- For those with Health Savings Accounts (HSAs), consider a contribution up to the maximum of $3,850 for self-only coverage and $7,750 for family coverage. Those over 55 years of age can contribute an additional $1,000 to the HSAs.
- For those with 401(k) plans, consider maximizing 401(k) salary deferrals up to the maximum of $22,500, and for those 50 years of age and over, consider the additional “catch-up” of $7,500.
2024 Cost of Living Adjustments to Important Tax Items
On November 9, 2023, the IRS provided their yearly release of updates of items that are adjusted annually for cost-of-living increases for more than 60 tax provisions for the 2024 tax year. Below are some of the key provisions:
Individual Taxpayers
- The standard deduction was increased to $29,200 for married taxpayers and $14,600 for single filers (up from $27,700 and $13,850, respectively).
- The refundable portion of the Child Tax Credit was increased to $1,700 per qualifying child (up from $1,500) for those with Adjusted Gross Income (AGI) less than $400,000 (married filing joint) or $200,000 (all other filing statuses).
Business Taxpayers
- The Section 179 expense deduction limitation was increased to $1,220,000, with the phaseout beginning on qualifying property purchases of $3,050,000 (up from $1,160,000 and $2,890,000, respectively).
- The three-year average annual receipt threshold limitation for adopting the Cash Method of Accounting was increased to $30,000,000 from $29,000,000.
Other Provisions
- The per-person gift exclusion was increased to $18,000 per person (up from $17,000).
The above are only a sample of ideas that may work for you. If you have any questions, please do not hesitate to contact your Bowers tax professional or email us at info@bcpllc.com.
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Disclaimer: To ensure compliance with requirements imposed by the Department of Treasury, we inform you any U.S. federal tax advice contained in this document or video is not intended for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.
