Umair
Are there still options to lower my 2024 taxable income?
If you qualify, you can make tax-deductible contributions to an individual retirement account or a health savings account by the April 15 tax deadline and have them apply to tax year 2024, said Eva Simpson, vice president of member value, tax and advisory services with the American Institute of Certified Public Accountants.
You can contribute up to $7,000 to a traditional I.R.A. for 2024 and an extra $1,000 if you’re 50 or older, the I.R.S. says. The size of your deduction depends on several factors, such as your filing status and whether you or your spouse, if you are married, is covered by a retirement plan at work.
Contributions to H.S.A.s are also tax-deductible, if you have a specific type of health insurance plan with a high deductible. If you’re eligible, you can contribute up to $4,150 (including any employer contributions) for 2024 if you have individual coverage, plus an extra $1,000 if you’re 55 or older, by the filing deadline.
Is there a tax break for college savings accounts?
There’s no federal tax deduction for contributing to 529 college savings plans, but some states offer deductions or credits on your state taxes. Most of them require the contributions to be made by the end of the calendar year to qualify, but eight (Georgia, Indiana, Iowa, Kansas, Mississippi, Oklahoma, South Carolina and Wisconsin) let you make contributions up until the tax deadline and get a tax break for the prior year, according to the website Saving for College.
What if I’m not ready to file my tax return?
You can get an extension until Oct. 15 by filing Form 4868 by the April deadline.
But note: An extension gives you more time to file, but it doesn’t give you extra time to pay if you owe tax, Ms. DiMaggio said. You should estimate what you owe and send a payment with your extension form. Otherwise, you may face penalties on the balance due for paying late — 0.5 percent of the tax owed for each month the bill remains unpaid, up to a total of 25 percent. That can add up. If you owed $10,000, your penalty would be $50 a month, until the total reached $2,500.
