Author: Aimee

Financial goals make excellent new year’s resolutions. And now, before the new year actually arrives, is the ideal time to think about your financial goals for 2024 and how those goals can contribute to a more effective tax strategy.

Maximize Tax Deductions and Credits

When you combine tax planning with a comprehensive financial plan, you can protect your money from unnecessary tax burdens. That means there’s more money available for your short-term and long-term needs and wants.

A good place to start is understanding the difference between a tax credit and a tax deduction.

A tax deduction is an expense that lowers your taxable income, such as the interest you pay on your home mortgage or student loans, out-of-pocket medical expenses and moving expenses from a job. 

A tax credit is a lump sum amount that pays off a portion of your owed taxes. These include the Earned Income Tax Credit for lower-income working families, the Child and Dependent Care Credit that offsets the cost of child care and credits for improvements such as solar panels that make a home more energy efficient.

Neely’s Accounting Service can help you research which tax deductions and tax credits you may qualify for now or after a major life event, like getting married or having a baby. Then you’ll have the 2024 calendar year to save records and receipts needed for the next tax year.

Optimize Retirement Contributions

Setting aside savings for your retirement years should be at the top of your financial planning list.

Contribute to your workplace retirement account up to the employer match or to a traditional IRA. Money invested in either can be deducted from your taxable income for the year you made the contribution. In 2023, the IRS allowed a maximum $6,500 in IRA contributions, or $,7500 for people 50 and older.

Strongly also consider contributions to a health savings account, which allows you to set aside money to pay for future qualified medical expenses. Your HSA has three tax advantages: 

• Contributions to these accounts can be deducted from your taxable income.
• Money in your account is invested and grows tax free. 
• You won’t owe any taxes on money withdrawn and used for qualified medical expenses.

In 2024, the maximum HSA contribution allowed by the IRS will be $4,150 for an individual and $8,300 for a family. 

Plan for Major Life Events

Another important piece of financial planning is to be prepared for major life events and any tax implications that come with them, such as getting married, having a child, or planning for educational expenses.

This is where a trusted financial partner, like Neely’s Accounting Service, can help you think through your options and create a financial blueprint that meets your unique needs.

Strategy Matters

Having clear financial goals and aligning them with tax planning strategies can have a significant impact on your financial resources in 2024. Our advisors are always ready to help you with personalized solutions that meet your needs and help you get the most of your financial resources in 2024.

An end-of-year charitable donation to a nonprofit or church is a meaningful way to celebrate the holidays and support the causes that are important to you. 

To be able to deduct your donation from your 2023 taxes, you’ll need to do a little planning ahead.

• You must give to a qualified charitable organization – meaning the organization must be registered as tax-exempt under section 501(c)(3) of the Internal Revenue Code. This information can usually be found on the nonprofit’s website. 

• You must keep good documentation for the IRS. This includes the date you made your donation, the name and address of the nonprofit, and a description of your donation. For monetary donations, that means a receipt or a canceled check. If you donated goods or services, you need a detailed list of each item and its estimated fair market value. (If you donated anything worth more than $5,000, you’ll need an actual appraisal of the item instead of the estimate.)

• You will need to itemize all your deductions on your 2023 tax return using Schedule A. Ultimately, you will need enough deductible expenses to exceed the standard deduction amount: $13,850 for single filers and $27,700 for married couples filing jointly. 

Here are a few ways to maximize your tax deductions in 2023.

• Bundled donations, or making two year’s worth of gifts in one calendar year, can be useful if you expect to be just shy of meeting the standard deduction amount on your 2023 tax returns. By bundling your 2023 and 2024 donations this year, you can maximize the tax benefit for this year.

• Use a donor-advised fund — basically an account that allows you to manage assets for future charitable giving. Your contribution to a donor-advised fund is immediately tax-deductible and you can distribute the funds to the charities of your choice over time. But be mindful of fees associated with these funds.

• Donate appreciated assets such as stocks or mutual funds that have increased in value. This gives you a charitable deduction plus it can shelter you from paying capital gains taxes on the appreciation.

Through year-end charitable giving, you can help make a difference in your community. According to multiple surveys, local nonprofits receive most of their annual budgets through donations given the last quarter of each year, meaning every gift matters.Charitable giving can also reduce your tax liability when you keep up-to-date and detailed records of your donations to qualified charitable organization. If you have questions, Neely’s Accounting Services has answers. You can count on us for strategic tax advice, so get in touch today.

As students head to campuses to begin their fall semesters, now is the time to educate the whole family on tax planning strategies for the next four-plus years. Whether you need education-related tax credits or tips to maximize your students’ financial aid eligibility, Neely’s Accounting Services can help both students and families ace this financial test.

Getting Started: The FAFSA

You’ll hear a lot about the Free Application for Federal Student Aid — commonly called the FAFSA. This is what colleges and universities use to determine if a student qualifies for federal financial aid or any of the school’s scholarships and aid programs. Families must fill out the FAFSA each year, but it’s the first year that really sets the foundation for a student’s financial aid package.

Here are a few tips to maximize your eligibility for financial aid:

• Even if you think your family won’t qualify, file a FAFSA. In reality, most families do qualify for some financial aid, and you’ll be eligible for school-specific, need- and merit-based scholarships and grants as well. Plus, you’ll be prepared in the event your financial situation unexpectedly changes before the start of the academic year.
• Submit your FAFSA as soon as possible after it’s available Oct. 1 to give your student the best shot at federal aid and grant programs that are award funds on a first-come, first-served basis. 
• Keep your family’s taxable income as low as possible the first year you file without doing the family financial harm. Small, thoughtful tweaks can make a difference, such as delaying the sale of stocks or bonds, avoiding early withdrawals from retirement savings and asking employers to defer a bonus to another tax year.

Is Your Student Still a Dependent?

Families should figure out whether their student will be considered a dependent during college. Parents can claim a full-time college student as a dependent until age 24 if they are proving more than half of the student’s support. Most college students fall into this category. If a parent does claim a student as a dependent, the student likewise will need to answer “yes” when asked on tax documents if someone else can claim him or her as a dependent. 

Take Advantage of Tax Credits

Several federal tax credits are available to help offset the cost of education. Pick the best one that fits your circumstances because they cannot be used in combination.

• The American Opportunity Credit: Qualifying students or their parents may claim up to $2,500 of college expenses — including tuition, fees, books and other requirements — for the first four years of schooling while working toward a degree or certificate. 
• The Lifetime Learning Credit: Qualifying students or their parents may claim up $2,000 in education expenses for an unlimited number of years. This would be helpful to a non-degree-seeking student or a graduate student.
• Tuition and Fees Deduction: Qualifying students or their parents can deduct up to $4,000 in education expenses paid directly to the student’s school. Expenses include tuition and related expenses required to be enrolled.
• Student Loan Interest Deduction: After graduation, a student can deduct the interest paid on student loans in the past year. The lender will provide the required interest statement each January.

Military Students and Veterans

Military students or students using a military benefit to pay for schooling should understand that their tax planning will look a little different. 

• For students received ROTC stipends for education and living expenses, these payments are not taxable and do not need to be included on your federal tax return.
• Cadets at the federal service academies, however, are considered on “active duty” while at school, so any payments made generally are taxable and should be reported as income on your federal return.
• Funds received from the VA for education, training, or subsistence are not taxable. 

Contact Neely’s Accounting for Expert Help

Neely’s Accounting Services can offer some time-tested lessons in tax planning. We’ve supported Roanoke-area individuals and business since 2007 with our big-city services and a hometown feel. Contact us today and let us set yourself up for tax success for your students’ college years.

February is the month of love, but most people don’t immediately associate taxes with fuzzy feelings. In fact, the mention of tax season fills them with dread. If this sounds like you, then we have great news! When you work with Neely’s Accounting, your taxes don’t have to be daunting. We’ve been Roanoke and Vinton’s go-to tax expert since 2007 because our team makes filing taxes so easy. 

Let’s take the stress out of tax season. Below are three reasons to love tax season with Neely’s Accounting Services on your side.

1. Big City Tax Service with Hometown Values

Don’t struggle through tax preparation software or outsource your taxes to an impersonal big box company. Instead, work with a local tax expert who understands your needs. At Neely’s we combine modern, streamlined services with deep community knowledge to offer affordable tax solutions that work. You’ll love working with a tax expert you can trust, and you may even recognize our CPAs from the local grocery, workout class, or event!

2. Customized Tax Support 

If you’ve ever had your taxes prepared by a stranger, you may have wondered if they truly understood the details of your financial situation. We understand that your tax needs are as unique as you are. Our local CPAs meet with you one-on-one to get to know you and your finances, so no detail is left behind. Plus, they’re available to answer any questions all year long so you can banish tax anxiety once and for all. 

3. Maximum Tax Returns

Customized tax services do more than just give you peace of mind. They also give you the maximum return possible. We pride ourselves on getting to know you, which means we can find every deduction you’re eligible for. When you work with us, you’ll love feeling sure that you received the maximum possible tax refund (and your bank account will love it too!). 

Contact Us to Get Started on Your Taxes

We’re proud to offer a full range of professional products at a fair price without sacrificing the individual attention you deserve. Our friendly, dedicated advisors are always ready to help you with personalized solutions that meet your needs.

Let us take the stress out of running your business and filing income taxes. Contact us or visit at either of our two convenient locations today.

What comes to mind when you think about tax season? Maybe you’re one of those people who gets excited about doing taxes. On the other hand, you might feel a sense of dread or confusion when you think about filing your taxes. If you’re the latter, you’re not alone. A recent study showed that one-third of taxpayers wait until the filing deadline to do their taxes and 56% don’t even know when the deadline is!

Whether you relish taxes or feel a bit nervous, having a trustworthy expert on your side can makes all the difference between complicated and stress-free. As Roanoke’s trusted tax experts, Neely’s wants you to have all the info you need. To help, we’ve compiled all the season’s tax deadlines so you can face the 2023 tax season with confidence. 

Personal Income Tax & Self-Employed Deadlines

• January 31, 2023 – Due date for employers to send W-2 forms. To ensure you’re able to complete your tax return on time, the IRS requires all employers to send you a W-2 no later than January 31 following the close of the tax year. Generally, this means W-2s get sent by January 31, but you won’t necessarily receive your form by this date.
• January 31, 2023 – Certain 1099 forms are sent. Various 1099 forms, and forms 1099-NEC,1099-MISC, and 1099-K are used to report payments that typically don’t come from an employer, such as if you work as an independent contractor, gig worker, or self-employed person or if you receive income such as interest, dividends, prize winnings, rents, royalties, or brokerage account transactions. If January 31 falls on a weekend or holiday, these forms are due to be sent the following business day.
• April 18, 2023 – Tax day (unless extended due to local state holiday). The tax deadline typically falls on April 15 each year, but can be delayed if it falls on a weekend or holiday. Missing the tax deadline can have consequences like penalties and interest.
• April 18, 2023 – Deadline to File Form 4868 and request an extension. The tax day deadline is also the last day to file Form 4868 requesting an extension to file your individual income tax return. If you won’t be ready to file your tax return by tax day, make sure you instead complete an extension request, granting you the ability to delay filing a completed return until October 16, 2023. But remember, even if you choose to file an extension, you are still required to pay any taxes you may owe by the April deadline.
• April 18, 2023 – Deadline to make IRA and HSA contributions for 2022 tax year. For individual income tax return filers, this also marks the final day to make contributions to your IRA or HSA for the 2022 tax year. After this date, you generally can’t make contributions for the previous tax year.
• April 18, 2023 – First quarter 2023 estimated tax payment due. Making estimated tax payments means that you need to estimate how much income you’re likely to make for the year and determine how much you will owe to the IRS for income taxes. You can use IRS Form 1040-ES to calculate how much tax liability you’ll have for the year. IRS Publication 505 contains all the rules and details you might need to know about how to calculate this amount. If you overestimated how much tax liability you’d owe for a year and are due a refund, you can choose to receive that money now or apply the overage to the following year’s quarterly tax payments.
• June 15, 2023 – Second quarter 2023 estimated tax payment due. Despite the IRS referring to these payments as quarterly estimated taxes, the due dates don’t necessarily fall within “quarters” nor do they each represent three months of tax payments. They represent an equal quarterly share of your estimated income tax liability paid at uneven intervals. The first payment occurs 3 and a half months into the year. The second payment is five and a half months; the third payment is eight and a half months, and the fourth payment is due 12 and a half months after the year starts.
• September 15, 2023 – Third quarter 2023 estimated tax payment due.
• October 16, 2023 – Deadline to file your extended 2022 tax return. If you chose to file an extension request on your tax return, this is the due date for filing your tax return.
• January 15, 2024 – Fourth quarter 2023 estimated tax payment due. This represents the final quarterly estimated tax payment due for 2023. If you choose the option to pay 100% of your previous year’s tax liability, any unpaid taxes will be due when you file your 2023 individual tax return by the April 2024 deadline.

Businesses – Partnerships (including LLCs), C Corps (Form 1120), and S Corps (Form 1120S)

• January 31, 2023 – Employers send W-2s forms to employees
• January 31, 2023 – Send certain 1099 forms
• March 15, 2023 – Taxes are due for some business types (partnerships, multi-member LLCs, and S-Corporations). Businesses organized as partnerships, including multi-member LLCs, and S-Corporations need to file Form 1065, or 1120S by March 15, 2023, if they are a calendar year business. If your business uses a fiscal year, you need to file your tax return by the 15th day of the third month following the close of your tax year. For example, if your business uses an April 1 – March 31 tax year, your business tax return would be due June 15 instead of March 15.
• April 18, 2023 – Taxes for C-Corporations are due. Businesses organized as C-Corporations need to file form 1120 by April 18, 2023, if they are a calendar year business. If your business uses a fiscal year, you need to file your tax return by the 15th day of the third month following the close of your tax year. For example, if your business uses an April 1 – March 31 tax year, your business tax return would be due June 15 instead of in April.
• September 15, 2023 – Deadline for extended partnership and S-corporation returns
• October 16, 2023 – Deadline for extended C-corporation returns
• January 15, 2024 – Fourth quarter 2023 estimated tax payment due

Contact Neely’s Accounting Services for Expert Tax Support in Roanoke. 

Since 2007, Neely’s Accounting Services has provided expert tax preparation and accounting in Roanoke and Vinton, VA. We help small and service-based businesses, restaurants, nonprofits & churches, and families and individuals. We pride ourselves on delivering big-city service with hometown values. Our friendly, dedicated advisors are always ready to help you with personalized solutions that meet your needs.

Let us take the stress out of running your business and filing income taxes. Contact us or visit at either of our two convenient locations today.