Steps to Take Before 2024 Ends to Secure Your Tax Credits
As the year winds down, it’s easy to feel overwhelmed, but it’s also the perfect time to lock in credits and deductions that can put real money back in your pocket come tax time this April. From the Earned Income Tax Credit to energy-efficient home upgrades and even adoption benefits, there are plenty of ways to reduce next year’s tax bill or boost your refund.
Here’s a quick guide to the top tax credits for 2024 and actionable steps you can take right now to maximize your savings:
Looking for Extra Cash? Check Out the Earned Income Tax Credit (EITC)!
What to Do:
Make sure you have earned income from wages, self-employment, or other qualifying sources.
Keep accurate records of your income and dependents.
Pro Tip:
Even if your income is low, file a tax return! The EITC is refundable, which means you could get a refund even if you didn’t owe or pay taxes.
Got Kids Under 17? Take Advantage of the Child Tax Credit (CTC)!
What to Do:
Ensure your children have valid Social Security numbers by 12/31/2024.
Verify your dependents meet the criteria (under 17 years old).
Keep key documents handy—birth certificates, school records, and proof of residency.
Pro Tip:
If filing separately, both parents should agree on who will claim the child to avoid complications.
Got Kids Who Need Care? Take Advantage of the Child and Dependent Care Credit!
What to Do:
Pay for childcare or dependent care expenses by December 31, 2024.
If you’re close to exceeding the income threshold next year, consider prepaying for 2025 services to maximize this year’s credit.
Obtain your childcare provider’s Tax ID (EIN or SSN) and keep payment records.
Ensure the care is provided so you (and your spouse, if applicable) can work or look for work.
Pro Tip:
Planning ahead can help you save big at tax time!
Got Kids in College? Don’t Miss the American Opportunity Tax Credit (AOTC) & Lifetime Learning Credit (LLC)!
What to Do:
Pay for qualified education expenses (tuition, fees, books) by December 31, 2024.
Ensure your educational institution provides a Form 1098-T.
Verify that you or your dependent is enrolled at least half-time to qualify for the AOTC.
Pro Tip:
The AOTC applies only to the first four years of higher education, so don’t miss your chance to claim it!
Ready to Save for Retirement? Don’t Miss the Saver’s Credit!
What to Do:
Contribute to a retirement account (e.g., 401(k), 403(b), IRA) by December 31, 2024.
For Traditional or Roth IRAs, you have until April 15, 2025, to contribute.
Even if you’re not ready to contribute yet, set up your account before the year ends.
Pro Tip:
Even small contributions can qualify for this credit, so start now and let your savings grow!
Need Health Insurance? Take Advantage of the Premium Tax Credit (PTC)!
What to Do:
Enroll in a Health Insurance Marketplace plan during the 2024 open enrollment period.
Report any income changes to the Marketplace to ensure accurate advance premium credits.
Keep records of your health insurance premiums (Form 1095-A).
Pro Tip:
Staying on top of your coverage and credits can save you money while keeping you protected!
Adopting a Child? Don’t Miss the Adoption Credit!
What to Do:
Finalize the adoption process or incur adoption-related expenses by December 31, 2024.
Keep detailed records of qualified expenses (e.g., fees, court costs, travel).
Ensure all necessary documentation for the adopted child is complete and accurate.
Pro Tip:
Every step you take brings you closer to providing a loving home and saving on your taxes!
Thinking About Windows or HVAC Upgrades? Don’t Miss the Residential Energy Credits!
What to Do:
Complete qualifying energy-efficient home improvements (e.g., insulation, windows, HVAC) by December 31, 2024.
Install renewable energy systems like solar panels, wind turbines, or battery storage.
Keep receipts, invoices, and Manufacturer’s Certification Statements on file.
Pro Tip:
Check eligibility for improvements to maximize your credit and save big on energy costs!
Thinking About a New Car? Take Advantage of Electric Vehicle (EV) Credits!
What to Do:
Purchase a qualifying electric vehicle or plug-in hybrid by December 31, 2025.
Verify that your vehicle qualifies for the federal credit (check the IRS list).
Keep the sales invoice and confirm eligibility for the credit at the time of purchase.
Pro Tip:
Go green, save money, and drive into the future with EV tax credits!
Got Healthcare Costs? Maximize Your HSA & FSA Benefits!
What to Do:
Contribute to your HSA (up to $4,150 for individuals and $8,300 for families in 2024) by December 31, 2024.
Use your FSA funds before the year ends or within the plan’s grace period to avoid losing them.
Keep all receipts for qualified medical expenses.
Pro Tip:
Take full advantage of these accounts to save on healthcare costs while reducing your taxable income!
How We Help You Make Smart Financial Decisions
At 20West Legal, we understand that tax planning is just one part of your financial journey. That’s why our comprehensive Planning Session goes beyond estate planning to help you make informed financial decisions that benefit you and your family now and in the future.
From energy-efficient home improvements to adoption credits, we’ll guide you on how different financial moves can impact your taxes and overall financial well-being. Our goal is to help you make decisions that align with your family’s goals and values.
Schedule a complimentary 15-minute consultation today: https://go.20westlegal.com/meeting-scheduler
This article is a service of 20WestLegal LLC. We don't just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That's why we offer a Planning Session, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love. You can begin by calling our office in Sudbury, Massachusetts today to schedule an Estate Planning Session and mention this article to find out how to get this $750 session at no charge.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.