Written by Katy Estrada, CPA | Updated December 27, 2023

Getting Your Tax Documents Organized

Below is a list of items I think pertain to most taxpayers. The last page is my customized checklist/organizer to help you gather your documents when the time comes to prepare your 2023 tax returns.  I recommend filling out this checklist and returning it to me with your documents.  I do not need original documents.  Feel free to scan and email, text or fax if this is more convenient for you.  I will provide your tax returns to you via Secure Website to save time, paper, envelopes and postage. It is a free service for online document retention that is secure.  Paper copies need to be done via special request.  You are welcome to upload your documents using this system as well.  The link is located on my website.

If you need of assistance with your late or extended filing, we’re here to help. However, please be aware that as of August 15th, our prices for filing support increased by 20%.

We understand that staying on top of your tax obligations can be challenging, but now is the time to act. Don’t hesitate to contact our team today to secure our services and ensure a seamless tax filing process.

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    Current tax deadline is April 15, 2024.  I’ll need your documents by March 31, 2024 or I’ll assist you in filing an extension.  Partnership and S-Corp deadline is March 15, 2024. C-Corp deadline is April 15, 2024.

    Firm Billing Rates

    I haven’t increased my firms billing rate in five years.  Beginning in 2024, my hourly rate is $150 and Tanya’s hourly rate is $50.  With the increased cost of being in business, I unfortunately have to pass this on to my clients. If this isn’t acceptable, I’ll be happy to provide any information needed to transfer.

    Get Organized

    Taxpayers should develop a recordkeeping system − electronic or paper − that keeps important information in one place. This includes year-end income documents like Forms W-2s, Forms 1099 for stock sales, Form 1099-K, Form 1099-NEC, Form 1099-MISC, and/or Form 1099-INT for example.  Ensuring your tax records are complete before filing helps taxpayers avoid errors that lead to processing delays. When you have all your documentation, taxpayers are in the best position to file an accurate return and avoid processing or refund delays or IRS letters.

    Update Your W4

    Please update your W4 form for 2024 with your employer now!  If you need help, I can easily email you one already filled out to give to your employer.

    Drivers Licenses Required to File in Most States

    Please provide your Driver’s license number, issue date and expiration date.  You will not receive a refund without “Proof of Identity”.  The state says they are reducing identity theft.

    To Itemize or Not, That is the Question: Difference in the Standard Deduction

    The standard deduction is an automatic reduction in your taxable income. You have the option of taking the standard deduction or itemizing your deductions. If you itemize, you calculate your deductions one by one. Itemizing is more of a tedious, but it’s worth it if your itemized deductions exceed the amount of the standard deduction.  Itemizing will not be worthwhile for millions of households.  Itemized deductions include medical expenses, SALT (state and local taxes), mortgage interest, and charitable donations.

    Filing Status 2021 Standard Deduction 2022 Standard Deduction 2023 Standard Deduction 2024 Standard Deduction
    Single $12,550 $12,950 $13,850 $14,600
    Married Filing Jointly $25,100 $25,900 $27,700 $29,200
    Married Filing Separately $12,550 $12,950 $13,850 $14,600
    Head of Household $18,800 $19,400 $20,800 $21,900

    2023 Mileage Rates

    65.5¢ per mile for business miles driven, 22¢ per mile driven for medical or moving purposes and 14¢ per mile driven in service of charitable organizations.

    Note: your business can deduct mileage calculation OR your actual expenses, not both.  Once you choose a deduction method, you must use that method for the life of that vehicle.  Also, if you itemize personal deductions, please provide me with the miles you drove to donate to charity, volunteer, go to doctor visits or pick up prescriptions.  This could add up to a great deduction.

    2024 Mileage Rates

    67¢ per mile for business miles driven, 21¢ per mile driven for medical or moving purposes and 14¢ per mile driven in service of charitable organizations.

    Retirement Contributions

    Traditional and ROTH IRA contributions are the lesser of $6,500 or 100% of earned income.  The annual ‘catch-up´ contributions if you are age 50 and over remain at an additional $1,000.  IRA’s must be funded before April 15, extensions not included.

    Business owners can contribute to a SEP (Self-employed Plan) which is an IRA with contribution limits of 25% of the owner’s salary or up to $66,000, whichever is smaller.  You may set up and fund a SEP as late as your tax-return filing date, including extensions. 

    Energy Tax Credit

    You can claim either the Energy Efficient Home Improvement Credit or the Residential Energy Clean Property Credit for the year when you make qualifying improvements. 

    • For the Energy Efficient Home Improvement Credit – through 2032: 30%, up to a maximum of $1,200 (heat pumps, biomass stoves and boilers have a separate annual credit limit of $2,000), no lifetime limit. Qualified purchases include Exterior doors, windows, skylights and insulation materials, Central air conditioners, water heaters, furnaces, boilers and heat pumps, Biomass stoves and boilers, and Home energy audits.
    • For the Residential Energy Clean Property Credit – 30%, no annual maximum or lifetime limit.  Qualified purchases include Solar, wind and geothermal power generation, Solar water heaters, Fuel cells, and Battery storage.

    Clean Vehicle Credit

    At the time of purchase, a seller must give you information about your vehicle’s qualifications. Sellers must also register online and report the same information to the IRS. If they don’t, your vehicle won’t be eligible for the credit.  You may qualify for a credit of $2,500 to $7,500 if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years. Please email me for more details if this applies to you.

    American Opportunity Credit

    This tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year for you or your dependent. Also, 40% of the credit (up to $1,000) is refundable. This means you can get it even if you owe no tax.  If you have higher than $80,000 of Adjusted Gross Income ($160,000 for joint filers), the credit is reduced.  If your AGI is greater than $90,000 ($180,000 for joint filers) you cannot claim the credit.  Please provide me with your 1098-T.

    Child Tax Credit

    For the 2023 tax year, the CTC is worth $2,000 per qualifying dependent child if your modified adjusted gross income is $400,000 or below (married filing jointly) or $200,000 or below (all other filers).

    Health Insurance

    Beginning in 2014 and forward, you have to reconcile your health care coverage and credits on your tax return. For most taxpayers, I will simply check a box to indicate that each member of your family had qualifying health coverage for the whole year through your employer.

    If you obtained a coverage exemption from the Marketplace or you qualify for an exemption that you can claim on your return, please provide me with the tax form 1095A provided to you at year end.

    Employer Providing Health Insurance

    A small business does not have to provide health insurance for its employees if you have fewer than 50 employees.  This is a common question for small business.  If you are an S-corporation, and paying your health insurance premiums and adding them to your W2, there are special rules under the Affordable Health Care act if you are using the Health care exchange and any subsidies.

    Note: Have you considered creating an HSA for you or your employees?  A Health Savings Account allows a business to reimburse the owner and/or employees for medical expenses. This creates a 100% business deduction instead of the personal itemized deduction which is often not met.

    Qualified Business Income Deduction (QBI)

    Under this relatively new law, taxpayers with pass-through businesses will be able to deduct 20% of their qualified pass-through income. In other words, if you own a small business and it generates $100,000 in profit, you’ll be able to deduct $20,000 of it before the ordinary income tax rates are applied.

    If your total taxable income — that is, not just your business income but other income as well — is at or below $182,100 for single filers or $364,200 for joint filers in 2023 you may qualify for the 20% deduction on your taxable business income.

    BOI Reporting (Beneficial Ownership Information) And What It Means To Small Business Owners

    Starting in 2024 tens of millions of small businesses will be filing a beneficial ownership information (BOI) report with a branch of the Department of Treasury called the Financial Crimes Enforcement Network (better known as FinCEN). A failure to comply can result in a company and the individuals responsible for the non-compliance being subject to hefty civil and criminal fines and even possible jail time.  I shall file this report on your behalf and FinCEN does not charge a fee for this report.  This federal report is separate from state filings.

    IRS Correspondence

    The IRS “does not initiate contact with taxpayers by e-mail to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.” I have seen an increase in Spam in recent years.  Do not open such emails and block the sender for safety.  Also keep in mind they will not call.  You will only receive letters via United States Postal services to the address last filed on your return.

    Note: Congress has enacted new legislation that more than doubles most penalties for late or incorrect information returns. This includes the Form W-2s and Form 1099s that a business must provide to any contractor it pays at least $600 for services. These returns are due to recipients by January 31, 2023 and the IRS soon after.

    Visit Tax Scams – How to Report Them (https://www.irs.gov/businesses/small-businesses-self-employed/tax-scams-how-to-report-them) for more information.

    In order to guarantee your return is filed timely, please have your tax documents to me by March 31, 2024.  If your documents are received after this date, I can file an extension on your behalf.  I will also help estimate if you owe and we can file an estimated tax due to avoid late payment penalties as taxes are due on April 15, whether you file your return or not. 

    We understand that staying on top of your tax obligations can be challenging, but now is the time to act. Don’t hesitate to contact our team today to secure our services and ensure a seamless tax filing process. The sooner we prepare your return during tax season, the better!  If you need of assistance with your late or extended filing, we’re here to help. However, please be aware that after August 15th, our prices for filing support increase by 20%.

    Thank you again for selecting me as your Certified Public Accountant. It is my privilege to provide you with professional services.  Tanya and I wish each of you a healthy and prosperous new year.

    Yours Truly,

    Katy Estrada, CPA Signature

    Katy Estrada, CPA

    For more information, visit www.katyestradacpa.com

    I want each client to feel like they are my only client.

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