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About Office Staff

The team at SWC simplifies complex tax issues, helps you build and leverage your wealth to enhance your personal and financial freedom, and offers unparalleled peace of mind at every step along the way.

Last-Minute Moves for Individual Taxpayers to Reduce 2024 Federal Income Tax

By |2024-11-06T11:36:43-08:00November 5, 2024|Categories: Tax Planning|Tags: , |0 Comments

With only two months remaining in the tax year, the time has come to get serious about reducing your 2024 federal income tax bill. The good news is that it’s not too late. The bad news is that you’re running out of time.

In this two-part series, we share tax-saving strategies you can implement prior to the end of this year to reduce your tax obligation for 2024. In Part 1, we focus on strategies for individual taxpayers. In Part 2, we shift our focus to tax-saving strategies for business owners.

individual taxpayer tax strategies 2024

 

Note: For now, we’re assuming that the tax law currently in effect for 2024 will remain in place. If anything changes due to the outcome of the upcoming election, we will certainly let you know. However, any changes to the tax code that would apply retroactively to 2024 would require an act of Congress, which isn’t likely.

Check Your Tax Withholding and Estimated Payments

To avoid any underpayment penalty, make sure the Federal Income Tax (FIT) withheld from your paychecks plus any estimated tax payments for 2024 is equal or greater than:

  • Your 2023 tax liability, or 110 percent of your 2023 tax liability if your 2023 adjusted gross income (AGI) exceeded $150,000 if you file as Married Filing Jointly (or $75,000 if you file as Married Filing Single), or
  • 90 percent of your 2024 tax liability

Participating in a Tax Projection Meeting in November or December can help you estimate your 2024 tax liability and adjust your withholding or calculate an estimated tax payment to minimize any potential underpayment penalty.

To schedule a year-end Tax Projection Meeting with SWC Founding Partner Marni Walker, please call our office at (858) 487-4580.

To schedule with Founding Partner Laura Stees, visit www.SWC.cpa/Contact, click “Schedule an Appointment,” then select “Tax Projection” to choose a convenient day and time.

Consider Bunching Itemized Deductions

Each year, you can deduct the greater of your itemized deductions (mortgage interest, charitable contributions, medical expenses, and taxes) or the standard deduction. The 2024 standard deduction is as follows:

  • $29,200 for couples who are married filing jointly (MFJ)
  • $14,600 for singles and for individuals who are married filing separately (MFS)
  • $21,900 for those who file as head of household (HOH).

If your total itemized deductions exceed your standard deduction every year, itemizing every year is best. However, if your total itemized deductions are close to the standard deduction without exceeding it, you may be able to save money by “bunching” your itemized deductions, so they exceed your standard deduction every other year.

For example, if you file a joint return and your itemized deductions are steady at around $28,000 per year, you will end up claiming the standard deduction in both 2024 and 2025. However, if you can bunch expenditures so that you have itemized deductions of $32,000 in 2024 and $24,000 in 2025, you could itemize in 2024 and get a $32,000 deduction versus a $29,200 standard deduction. In 2025, your itemized deductions would be below the standard deduction, so you’d claim the standard deduction.

Here are a few ways you can bunch deductions by moving them into an earlier tax year: Continue reading… Continue reading… Continue reading…

Divorce and Social Security: What You Need to Know

By |2024-10-16T12:24:31-07:00October 16, 2024|Categories: Divorce and Taxes|Tags: , |0 Comments

Perhaps surprising to most people, California boasts among the lowest divorce rates in the nation, ranking seventh behind Illinois, New York, Minnesota, Alaska, New Jersey and Vermont.

Of course, that doesn’t mean Californians are immune from marital discord, discontent, or total breakdown. In fact, the most recent data from the U.S. Census Bureau’s American Community Survey shows that divorce rates are trending upward. Also eyebrow-raising? Nowhere is that truer than among those couples who are 50 years old and older. It’s so common now among that demographic that there’s even a term for it — “gray divorce,” which according to The Journals of Gerontology: Series B, accounts for 36 percent of all divorces in the United States.

Photo for divorce and social security

If you or someone you know is age 50 or over, with a divorce on the horizon, or in progress, or that recently occurred, here’s what we want you to know about divorce and Social Security.

Divorce and Social Security

If you are divorced, it might benefit you financially to collect Social Security retirement or disability benefits based on your ex’s earnings instead of your own. For you to qualify, all of the following six conditions must be met:

  • You’re 62 years or older.
  • You were married to your ex-spouse for at least 10 years.
  • You have been divorced from this ex-spouse for at least two years. (This condition applies only if you are claiming benefits before your ex-spouse has claimed benefits.)
  • You aren’t currently married. (If you marry someone else, you cannot claim benefits based on your ex-spouse’s work record unless the new marriage ends in divorce, death, or annulment.)
  • Your ex-spouse is currently entitled to receive Social Security retirement or disability benefits.
  • Your benefit amount, based on your own earnings record, is not equal to or greater than half of your ex-spouse’s Social Security benefit.

After a divorce, you have a choice: Continue reading… Continue reading… Continue reading…

The Top 10 Reasons Why Business Owners Need to Meet With a CPA This Summer

By |2024-06-13T12:12:39-07:00June 13, 2024|Categories: Business Taxes|Tags: , , , , , |0 Comments

A few days ago here on the SWC blog, we shared why it’s important for individual taxpayers to meet with their CPA over the summer. It basically boils down to being prepared. No one wants to learn in the first quarter of 2025 that their state or federal tax liability could have been dramatically reduced or altogether eliminated had they just met with their CPA for one hour in June, July, or August.

As a business owner, the same logic applies. Below are the top 10 reasons why you as a business owner, entrepreneur, or an investor with an ownership stake in a business should schedule a mid-year meeting with your CPA this summer.

Marni Walker of SWC

  1. Take Advantage of Depreciation Tax Breaks: Current tax laws offer generous depreciation deductions for qualifying assets. By discussing your plans with us, we can help you maximize your Section 179 deductions and first-year bonus depreciation, potentially saving you significant amounts on your tax return.
  1. Time Business Income and Deductions: Strategically timing your business income and deductions can lead to substantial tax savings. Whether it’s deferring income or accelerating expenses, we’ll help you make the right moves to align with your financial goals.
  1. Maximize the Qualified Business Income (QBI) Deduction: The QBI deduction can be a significant tax saver for owners of pass-through entities. We’ll ensure you understand the complexities and limitations of this deduction, helping you plan to maximize your benefits.

Continue reading… Continue reading… Continue reading…

The Top 10 Reasons to Ask Your CPA for a Mid-Year Meeting This Summer

By |2024-06-13T12:13:54-07:00June 11, 2024|Categories: Tax Planning|Tags: |0 Comments

Here at SWC, where we’re known as a leading independently owned tax planning and financial strategies advisory firm, we believe in empowering our clients with the tools and knowledge they need to make informed financial decisions.

Part of that approach is to offer a complimentary mid-year meeting that helps our clients navigate the complexities of tax planning, reduce their tax-related liabilities, and maximize their financial well-being.

2024 Mid-Year Tax Planning Meeting Graphic

If you’ve never heard of a mid-year meeting, it’s generally considered a preemptive move that allows you to discuss your financial situation with your CPA well before the end of the year when it’s often too late to implement strategies that can reduce your 2024 tax labilities.

Being on the fence about scheduling a mid-year tax meetings is understandable. After all, it’s summer, and who wants to be cooped up in a meeting with a CPA? But consider this: you have the ability to meet with us online — yes, even from your hotel room if you’re on vacation. Just pick a time slot that is available from now through the end of August. It’s only an hour of your time that likely will result in many hours of peaceful sleep before the end of the year.

With that in mind, here’s our top 10 reasons why you — the individual taxpayer — should schedule a mid-year meeting with your CPA this summer:

  1. Review and Adjust Your Withholding: A mid-year review of your withholding can ensure that you’re on track to meet your tax obligations without overpaying. Adjusting your withholding now can prevent surprises at tax time and help you manage your personal cash flow more effectively.
  1. Maximize Retirement Contributions: Reviewing your retirement contributions mid-year allows you to make necessary adjustments to maximize your savings. Whether it’s contributing to an IRA, 401(k), or

Continue reading… Continue reading… Continue reading…

What You Need to Know About Reporting Beneficial Ownership Information

By |2024-05-01T15:00:33-07:00January 19, 2024|Categories: Business Advice|Tags: , |0 Comments

In 2021, the United States Congress passed the Corporate Transparency Act — a measure that creates a new beneficial ownership information reporting requirement. This requirement is part of the U.S. government’s efforts to make it harder for criminals, terrorists, and other bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

Beneficial Ownership Information Graphic

Starting Jan. 1, 2024, many companies will be required to report information to the U.S. government — specifically to the Financial Crimes Enforcement Network (FinCEN) — about who owns and controls them directly or indirectly. FinCEN begins accepting beneficial ownership information (BOI) reports on Monday, Jan. 1, 2024, electronically through a secure filing system accessed through its website at www.fincen.gov/boi. However, the actual deadline for filing is based on the date of your company’s creation or registration to do business.

For example:

  • A reporting company created or registered to do business before Jan. 1, 2024, has until Wednesday, Jan. 1, 2025, to file its initial beneficial ownership information report. (A reporting company is a business entity that’s required to report its beneficial ownership information; not all companies are required to do so. See the next section to determine whether your company is required to report its beneficial ownership information or not.)
  • A reporting company established or registered between Jan. 1, 2024, and Jan. 1, 2025, must file its initial beneficial ownership information report within 90 calendar days after receiving notice of its creation or registration. This deadline of 90 calendar days commences upon the company’s receipt of official notice confirming its effective creation or registration, or following the initial public notice of the company’s creation or registration by a secretary of state or similar office, whichever occurs first.
  • Companies subject to reporting, established or registered on or after Wednesday, Jan. 1, 2025, must submit their initial BOI (Beneficial Ownership Information) reports to FinCEN within 30 calendar days from the official confirmation or public announcement validating the effectiveness of the company’s creation or registration.

In this post, we bring you up to speed on what you need to know to comply with the requirement to report beneficial ownership information for any reporting companies you own or control; for example, if you operate your small business as an S-Corp or LLC. (Please note: The content of this blog post is not intended to serve as legal or financial advice. For more information, please refer to the Disclaimer at the end of this post.)

Warning! If you receive any correspondence claiming to be from a government agency instructing you to click a link or website address or scan a QR code to provide information about your company, disregard it. Such letters or email messages are fraudulent. Do not respond to them or click on any links or scan any QR codes they may contain. The Financial Crimes Enforcement Network (FinCEN) does not send unsolicited requests.

Determining Whether Your Company Is Required to Report Its Beneficial Ownership Information

There are two types of reporting companies (companies required to report beneficial ownership information): Continue reading… Continue reading… Continue reading…

How To Properly Document Your Charitable Contributions for Tax Purposes

By |2023-11-08T11:35:04-08:00November 8, 2023|Categories: Charitable Contributions|Tags: , , , , , , , |1 Comment

Sometimes, it truly is better to give than to receive, especially when tax time rolls around and you’re looking for ways to reduce your reported income. The more generous you are, up to a point, the bigger your deduction, and the lower your tax obligation.

The drawbacks are few: You need to itemize your deductions instead of claiming the standard deduction, and you must document your charitable contributions. With the IRS gearing up to take a closer look at tax returns — especially those of high-income individuals — keeping detailed documentation is more important than ever.

Charitable Donation Documentation Requirements illustration

In this post, we offer some general guidance on claiming deductions for charitable contributions. We also provide detailed guidance on how to document those contributions to maximize your tax benefits and get something back for your generous philanthropic efforts.

Choose Eligible Charities

The first step to claim deductions for charitable contributions is to donate to organizations that have a legitimate tax-exempt status. Only donations made to eligible nonprofit organizations, such as registered charities, religious organizations, educational institutions, and certain foundations, can be claimed as deductions on your tax return.

The IRS maintains a searchable database of qualified organizations on its website. Before donating to an organization, you can check to see whether it’s in the IRS database of tax-exempt organizations. Use the Internal Revenue Service’s (IRS’s) Tax-Exempt Organization Search tool at apps.irs.gov/app/eos.

Keep Detailed Records

Maintaining accurate records is essential when claiming deductions for charitable contributions.

Warning: When you donate, don’t forget to ask for a receipt or acknowledgment letter from the charity, which should include the charity’s name, the date of the donation, and the amount donated. These records are crucial when you file your tax return and need to prove your deductions.

Specific documentation requirements are as follows: Continue reading… Continue reading… Continue reading…

Complying with CalSavers — California’s Retirement Savings Mandate for Employers

By |2023-11-03T14:51:27-07:00November 3, 2023|Categories: Retirement Planning|Tags: |0 Comments

As Southern California’s tax planning and financial strategies advisory firm for entrepreneurs and small business owners, we here at SWC play a unique role in helping our clients understand and comply with California’s tax laws and related regulations.

Small-business owners rarely have lawyers or lobbyists to represent them and keep them informed. Many small business owners aren’t even connected with resources like their local Chamber of Commerce. That’s where we come in. We are trusted tax professionals that our clients can turn to for information, guidance, and support.

And that includes notifications and updates related to CalSavers and California’s retirement savings mandate.

What Is CalSavers?

CalSavers Graphic

CalSavers is California’s retirement savings plan for workers whose employers don’t offer a workplace retirement plan, and for self-employed individuals and others who want to save extra toward retirement. Savers contribute to a Roth IRA (individual retirement account) that belongs to them but is administered by the state.

For a more detailed CalSavers primer, including how to register your business, please see our previous post, “Getting Up to Speed on CalSavers: California’s State-administered Retirement Plan.”

Designed to be easy for employers and simple for employees, CalSavers is professionally managed by private sector financial firms with oversight from a public board chaired by the State Treasurer. There are no fees for employers, and employees manage their accounts directly with CalSavers.

Employers that don’t offer their own plan must register with CalSavers by a specified deadline and facilitate their employee’s access to the program. And if they don’t?  Well, that’s what the rest of this post is all about.

Is Your Business Required to Participate?

In 2023, the employer mandate was expanded to include employers with one (1) or more employees. Your business is exempt from participation in CalSavers in only three cases: Continue reading… Continue reading… Continue reading…

Designating Yourself a ‘Real Estate Professional’ and Claiming Real Estate Losses Against Ordinary Income

By |2023-10-05T15:42:16-07:00October 5, 2023|Categories: Real Estate|Tags: , , , |0 Comments

Welcome to the world of real estate, where savvy individuals who have earned the right to call themselves real estate investors have more options for taking advantage of tax-saving opportunities.

For those involved in the real estate industry, “materially participating” in the management of your properties or investments and being classified as a “real estate professional” can translate to substantial tax savings, leaving you with more cash to build your real estate investment portfolio.

In this post, we explore the distinct tax advantages that come with material participation and being recognized as a real estate professional, delving into how these designations can increase deductions, minimize tax liability, and ultimately enhance your financial portfolio of real estate investments.

Whether you’re a seasoned investor or a newcomer eager to optimize your tax planning, understanding and harnessing the potential of these classifications can accelerate your progress toward meeting your real estate investment goals and your overall financial goals.

Image for Designating Yourself a ‘Real Estate Professional’ and Claiming Real Estate Losses Against Ordinary Income

Claiming Real Estate Losses Against Ordinary Income

As real estate investors know, rental real estate is ordinarily a “passive” activity. Generally, when you’re preparing your tax return, you can deduct passive losses only from passive income — income from sources such as stocks, mutual funds, royalties, and rental properties. You’re generally not allowed to deduct passive losses against ordinary income — income from sources such as salary and interest.

If all your income is passive, or if your passive gains exceed your passive losses, this restriction doesn’t impact your tax obligation. However, if your passive losses exceed your passive gains, and you have ordinary income, being able to claim passive losses against ordinary income can reduce your tax obligation.

There are two important exceptions that allow you to claim passive losses against ordinary income: Continue reading… Continue reading… Continue reading…

© 2014- Stees, Walker & Company, LLP (SWC). All rights reserved.
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