Tax preparation for 2024

LFC is beginning the process of getting ready for the 2024 tax season. LFC encourages clients to act early in gathering tax documents and scheduling meetings.  Below is a short item list as we begin preparing for the 2024 filing season:

Business Clients

• Set appointment with LFC before the end of the year to review current business status and to determine estimated business income for 2024. Discussion should also include major changes that occurred in 2024.
• LFC will work with business owners to determine 4th quarter 2024 estimated tax payment due in January 2025, if payment is necessary. Or, if scheduled payment needs to be adjusted due to changes in business conditions in 2024.
• Contact payroll processor to determine if there is any missing information on employees before W2s are produced in January. Other payroll reports due in January are 941, 940, and MN wage reports for MN Department of Revenue and MN Unemployment.
• Determine if there are vendors who have not provided W9 information.  W9s need to be received before 1099s can be completed in January. 1099 vendors include non-corporate service providers and landlords.  1099s are also due to lawyers for services provided businesses. 
• Ensure all bank reconciliations are completed before tax return is started.  This includes credit card statements.  
• Update fixed asset list to include changes in 2024 such as major purchases and disposals.
• Provide information on employee and benefit changes during 2024.
• File Beneficial Ownership Information (fincen) report for any active business by 12/31/24 if you have not done so.  For those businesses formed in 2024, check the link for due date. (click here for website).

Individual Clients

• Set appointment with LFC to discuss 2024 tax liability prior to the close of 2024 (before the end of December).
• LFC will work to determine 4th Quarter estimated tax payment, if necessary. Or, make changes to scheduled estimated tax payment due in January 2025.
• Be prepared to collect tax documents as they arrive. Checklist will be available by LFC in the near future to serve as a guide for taxpayers during the tax season.
• Once documents are received, set an appointment or ask LFC to send secure link to transfer data.

For the 2024 tax season, LFC will be working to improve efficiency in processing tax return.  By being better organized and minimizing data transfers, the tax return process will be a much better experience for the client.

Tax year 2025

 Earlier this month, the IRS has released Revenue Procedure 2024-40 to provide information on adjustments and changes for the 2025 tax year (returns filed in 2026).

Check out the link below for the details:

Revenue Procedure 2024-40

Tax policy - the importance of elections

 With the election coming up in November, it is important to understand what is at stake in regard to tax policy and its impact on the economy at large.

At the end 2025, the Tax Cuts & Jobs Act from 2017 is set expire if not renewed or extended.  This has been a significant tax law for taxpayers, particularly middle income taxpayers and small business owners.  Here are some features of the tax law that have provided significant tax savings:

1.  C corporations taxed at a flat 21%

2.  20% deduction for Sole proprietorships and pass-throughs (S Corps and LLCs)

3.  Increased standard deductions across the board (Single, MFJ, MFS, H of H)

4.  Expansion of the tax brackets (more income taxed at lower rates)

5.  Child credit of $2000 per child and $500 credit for other dependents

These are just a few of the items that will go away if the law is not extended or renewed.  When voting in the upcoming election, it is important to consider the impact of one's vote on important tax policy and which candidates are likely to continue supporting this important legislation or would support repealing it. 

After the election, taxpayers will have to be vigilant in their tax planning regardless on which candidate wins.  However, it will be much better for taxpayers if the candidates that get elected will support this legislation.  

LFC can help taxpayers with their tax planning needs.  Contact the office to set a time to discuss your individual situation:

Appointments:   Online scheduler for Liberty Financial Consulting Inc. in Roseville, MN (fullslate.com)

Email at:   info@lfconinc.com

2023 Tax Season

 The 2023 tax filing season is rapidly approaching and LFC is working to ensure the  process for its clients will be handled as effectively and professionally as possible.

If you are a current client of LFC or would like to become one, check our website for checklists and other documents to get started after all documents are received during January 2024.

If you would like to set an appointment before the end of 2023 to discuss year-end tax savings strategies, visit our website or click on the 'Schedule Appointment' button.

Website:     www.lfconinc.com

We look forward to the up-coming tax season!

2022 Tax season

 The 2022 tax season will be soon be upon us.  In order to help make the 2022 filing season operate smoothing for individuals and business owners, here are some things to consider:

Businesses

1.  Evaluate vendor profiles to ensure Tax ID numbers are obtained for those vendors who will need to receive a 1099.  These are vendors who perform services and are paid more than $600 for the year.  If Tax IDs are needed, send a W9 form to the vendor for them to fill out and return. W9 should be received back from vendors no later than 12/31/22.  1099s are not exclusive to vendors who provide contracted services.  Also include 1099s for amounts paid to legal services, rents, barter exchanges, and interest and dividends paid to shareholders.  This is not an exhaustive list of 1099 recipients.  Review the IRS website for more information on 1099 processing.

2.  Review with LFC projected net income for the year to determine business taxable income.  Determine if estimated payments made during the year are sufficient to pay tax due in 2022.  Make revision to 4th quarter tax payment if necessary.

Important dates to remember 

1/31     1099s and W2s to recipients

            940 & 941 Payroll Quarterly reports due

            MN wage reports (Income Tax & MN UI) due

3/15     Partnership and Corporate returns due 

            Filing an extension for partnership and corporate returns

4/17   Schedule C business tax returns due 

9/15   Extension deadline for partnership and corporate tax returns due

Individuals

1.  Review with LFC most recent paystub to determine if withholding taxes are sufficient to pay tax liability for 2022.

2.  Calculate estimated tax payment for January 2023 if determined withholding for 2022 is inadequate to pay total tax for 2022.

4.  Complete new W4 and implement in January 2023 to ensure tax is accurate for 2023.

Important dates to remember

1/17      Due date for 4th quarter estimated tax payment for 2022 

4/17      Due date of individual tax return

              Final date to make prior year contribution to IRAs

              Filing an extension for individual returns due

10/16     Filing deadline for extended individual returns due