One of the advantages of tax planning is that when April rolls around, you are not in a rush to get your tax documents and information together to file before the April 15 deadline.
However, even if you waited until the last minute to file, there are still some tax planning strategies for individuals and businesses that you can enlist now. Just in time before the tax deadline.
The importance of tax planning can’t be underestimated, and the benefits are twofold. For one thing, enlisting tax planning strategies months, weeks, or even days before the April filing deadline leads to opportunities to take more deductions and credits, which results in lower taxes. In addition, the primary significance of tax planning is that there aren’t any errors that could lead to an IRS audit and, potentially, hefty tax penalties.
Generally, audits are traditionally rare, but since the IRS was granted $80 billion in funding under the Inflation Reduction Act, the agency plans to increase the number of audits that occur every year, starting in 2024.
A tax planning services provider can help you take advantage of last-minute credits and deductions. In addition, they can pave the way for better tax planning initiatives in the years ahead. But in the meantime, here is what you need to know as the final days to file your 2023 taxes become imminent.
Upcoming Deadlines to Remember
Almost everyone knows that April 15 has historically been the annual tax deadline date. However, this isn’t always the case, and there are some other key dates to remember for 2024.
Federal Deadlines for 2024 Taxes
- April 15 – The deadline for most American taxpayers to file a federal tax return is Monday, April 15, 2024.
- April 17 – The deadline for taxpayers living in Maine and Massachusetts is Wednesday, April 17, 2024, due to the observances of Patriot’s Day on April 15, 2024, and Emancipation Day on April 16, 2024.
- June 17 – Some areas of the country that have been heavily impacted by weather and declared disaster areas by the Federal Emergency Management Agency (FEMA) have until June 17, 2024, to file their federal tax returns. These regions include parts of Connecticut, Maine, Rhode Island, and West Virginia, and a complete list of areas that qualify for the extended June 17 deadline can be found on the FEMA website.
State Deadlines for 2024 Taxes
State taxes are typically due on the same day that federal taxes are due –April 15. However, there are a handful of exceptions, which are listed below.
For tax year 2024, the following tax deadlines apply:
- Massachusetts – Deadline is April 17, 2024
- Maine – Deadline is April 17, 2024
- Hawaii – Deadline is April 22, 2024
- New Mexico – Deadline is April 30, 2024 (only for e-returns)
- Oklahoma – Deadline is April 20, 2024 (only for e-returns)
- Delaware – Deadline is April 30, 2024
- Iowa – Deadline is April 30, 2024
- Virginia – Deadline is May 1, 2024
- Louisiana – Deadline is May 15, 2024
Also, remember that some states do not collect income taxes – namely Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. So, if you live in one of these states, a state filing deadline is a non-issue.
Key Deductions and Credits for 2024
Because of the Coronavirus pandemic followed by a prolonged period of inflation, taxpayers will likely notice several changes in their annual return. Many of these changes include alterations of key deductions and credits.
There are several tips you can employ to minimize your taxes, but when it comes to deductions and credits to pay particular attention to for 2024, keep the following areas in mind:
- Standard deductions versus itemized deductions – it’s worth exploring both options to see which will minimize your taxes the most.
- Education credits – There is a wide range of education credits for both dependents and adults furthering their education through varying courses, classes, and educational materials.
- Healthcare deductions – If you had hefty medical bills this past year, review the healthcare deductions that may be at your disposal.
- Energy-efficient home improvement credits – These credits come into play if you have made any energy-efficient improvements to your home, like adding new windows or doors or installing solar panels.
Tax Planning Strategies for the Final Days
Even if you waited until the days before the April 15 deadline, there are always strategies you can adopt to make the tax filing process easier.
- Review your previous tax returns for missed opportunities. If you are rushing to file, you may miss some credits or deductions you took advantage of in previous years when you had more breathing room and preparation time to file your taxes. Review your returns from previous years to identify any potential missed opportunities.
- Review your previous tax returns for potential errors. Conversely, the IRS will notice if there are drastic changes between your previous years’ and your 2023 tax year returns. Use past returns as a resource to double check your calculations and deductions. For example, if you donated $50 to charity in 2022 but donated $5,000 to charity in 2023, it’s a significant difference that could be a red flag to the IRS.
- Keep all your forms and documentation in one place. It’s easy for different forms and receipts to get shuffled around and slip through the cracks. Therefore, keep all your tax documentation in one place for easy access and review. It’s also helpful to keep track of your income, credits, deductions, and other calculations in an Excel or Google spreadsheet, so you can easily double-check your numbers.
File Your Tax Return and Start Planning for 2024
At Waters Hardy, we can help you conduct last-minute reviews for this year’s taxes, and more importantly, we can help you develop a smart and strategic game plan for 2025 and beyond.
It’s never too late to ask for last-minute tax assistance, and it’s never too early to start planning for next year.
Reach out to our expert team today to start the conversation. Together, we will work to ensure that when it comes to your annual taxes, you are well-prepared now and well into the future.