10 Matters to Talk about with Shoppers

Office accounts. Encourage shoppers to think about maximizing contributions to their office plans to take full benefit of any employer match profit.

Conventional IRAs. Maxing out contributions to conventional IRAs is another choice. See under for the newest quantities that may be put aside this yr. Modified adjusted gross revenue (MAGI) limits for contributions to conventional and Roth IRAs elevated in 2024, so you’ll want to review MAGI eligibility thresholds.

If allowed beneath an employer’s plan, people can carry over as much as $640 in unused well being versatile spending account (FSA) quantities. Though the rollover possibility applies to the employer’s plan yr somewhat than the calendar yr, your year-end evaluation may embrace a take a look at how shoppers have tapped their FSA to this point and whether or not they need to make adjustments in future years. Shoppers with dependent-care FSAs can save as a lot as $5,000 per household or $2,500 per filer if they’re married however submitting individually in 2024.

Now can be the time to debate maximizing well being financial savings account (HSA) contributions with shoppers who’ve high-deductible well being plans (HDHPs). Though this generally is a pretty advanced planning space, right here’s a normal overview of how HSA limits work:

Don’t neglect to debate pro-rated versus “last-month-rule” contributions for shoppers who had an HDHP for a part of 2024.

Shoppers on the brink of a tax bracket might be able to put themselves within the decrease one by deferring some revenue to 2025. Listed here are a number of thresholds relevant in 2024 to remember:

• 37 % marginal tax fee: Taxable incomes exceeding $609,350 (particular person), $731,200 (married submitting collectively), $609,350 (head of family), and $365,600 (married submitting individually)

• 20 % capital beneficial properties tax fee: Taxable incomes exceeding $518,900 (particular person), $583,750 (married submitting collectively), $551,350 (head of family), and $291,850 (married submitting individually)

• Further Medicare tax: For shoppers with W-2 or self-employed revenue above sure MAGI thresholds, complete Medicare taxes shall be 2.35 % and three.8 %, respectively

• 3.8 % surtax on funding revenue: The lesser of web funding revenue or the surplus of MAGI better than $200,000 (particular person), $250,000 (married submitting collectively), $200,000 (head of family), and $125,000 (married submitting individually)

Yr-end monetary planning actions ought to embrace a evaluation of capital beneficial properties and losses to your shoppers and an evaluation of whether any portfolios need rebalancing. This course of could reveal tax-planning alternatives, resembling harvesting losses to offset capital beneficial properties.

Charitable contributions donated on to a professional charity or a donor-advised fund (DAF) could also be eligible for a federal tax deduction. Consider, although, that this technique is just helpful if shoppers itemize deductions. So, it’s worthwhile for shoppers to satisfy with their tax professionals to debate whether or not their charitable contributions and different deductions will exceed their customary deduction. A technique you may obtain that is by bunching the annual presents usually revamped a number of years into one lump-sum reward in a single yr.

Deductions on DAF contributions are capped at 60 % of AGI for money and 30 % of AGI for long-term appreciated securities. Typically, these may be carried ahead for the yr of donation, plus a further 5 years till the complete deduction quantity has been exhausted.

Certified charitable distributions (QCDs) could also be a consideration as effectively: Shoppers ages 70½ and older could make a QCD of as much as $105,000 on to a charity; married joint filers could exclude as much as $105,000 donated from every partner’s IRA.

Whereas these distributions to charity don’t qualify for a charitable tax deduction, they do have revenue tax advantages and may fulfill the RMD requirement. SECURE 2.0 expanded the allowable recipients of QCD distributions to charitable the rest trusts and charitable reward annuities, beneath which the shopper or the shopper’s partner could retain an revenue curiosity, with the rest payable to charity. QCDs to such “split-interest entities” are restricted to a lifetime restrict of $50,000.

Different minimal tax (AMT) exemption limits elevated in 2024 to $85,700 for single tax filers and $133,300 for married joint filers. Relying on AMT projections, shoppers could wish to wait till January 2025 to train incentive inventory choices.

Shoppers who could also be topic to an estimated tax penalty can ask their employer to regulate their withholding to cowl shortfalls (by way of Type W-4). The IRS tax withholding estimator generally is a worthwhile useful resource right here. They might additionally discover utilizing Form 1040-ES to make their estimated quarterly funds for revenue that’s not topic to withholding.

After the Supreme Courtroom overturned the Biden administration’s proposed scholar debt cancellation plan, federal scholar loans resumed accruing curiosity on September 1, 2023, with funds resuming as of October 2023. These funds have been topic to a 12-month “on-ramp transition interval,” throughout which default was waived for nonpayment. The on-ramp interval ended on September 30, 2024.

Moreover, the Supreme Courtroom just lately determined to not elevate the injunction positioned on President Biden’s Saving on a Valuable Education (SAVE) plan—which changed the Revised Pay As You Earn (REPAYE) plan. All debtors presently enrolled within the SAVE Plan have been positioned in forbearance.

In keeping with the Federal Student Aid website, debtors ought to hear from their mortgage servicers relating to subsequent steps. For the newest data, counsel your shoppers seek the advice of this helpful webpage and join updates on the U.S. Department of Education website.