Four Things CPAs Are Thankful For This Year
Time for Gratitude and Reflection
As we enter the season of gratitude and reflection, many of us find ourselves looking back on the year with appreciation for the tools and opportunities that help us make a difference in others' lives. For CPAs, this includes an arsenal of professional tools that not only aid in saving clients money but also help them plan ahead and feel more at ease when tax season rolls around.
Four Things I’m Thankful for as a CPA
The Standard Deduction
The standard deduction is a true game-changer. At $15,750 for single filers, $31,500 for married couples filing jointly, and $23,625 for heads of household, it often outpaces itemized deductions. I always remind clients: If your itemized deductions don't measure up to these amounts, the standard deduction is your clear, easy choice. Just last week, I discussed with a couple how opting for the standard deduction would significantly simplify their tax process while maximizing their savings.
Retirement Account Contributions
Retirement accounts are an excellent way to secure a comfortable future. Whether through an IRA, with contributions up to $7,000 ($8,000 if aged 50+), or a 401(k), allowing for up to $23,500 ($31,000 if aged 50+), the savings potential is considerable. With special catch-up contributions coming into play for those aged 60-63 in 2025, the ability to bolster retirement savings further will be even more advantageous. The difference between Traditional and Roth contributions is often a topic I cover in meetings, emphasizing the benefits each has based on their current financial standing and anticipated retirement outlook.
Health Savings Accounts (HSAs)
With individual coverage contributions set at $4,300 and family coverage at $8,550, HSAs provide a unique triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses. Plus, for those aged 55+, there's an additional $1,000 catch-up contribution. A client shared a story about how, when tapping into their HSA during a medical emergency, they were grateful for those tax-free withdrawals. It’s these kinds of benefits that make HSAs a tool I frequently recommend when suitable.
The Child Tax Credit (CTC)
The CTC is essential for families, offering up to $2,200 per qualifying child under 17, with $1,700 potentially refundable, depending on income. For single filers, the phase-out threshold is $200,000, and for joint filers, it's $400,000. I have a family client who maximized their eligibility for the CTC post these strategic discussions, finding immense relief in the additional refund available.
As the year end approaches, I encourage everyone to review these opportunities and ensure they are maximizing their potential. Year-end reviews are critical, and as always, feel free to reach out for professional guidance. Our conversational and friendly approach makes us here to assist you in every step of your financial journey!