When the sting fades away….
Congratulations! Most of you have made it past the tax filing deadline. How did things go between you and Uncle Sam this year? Still stinging a little bit? When it does fade away, here are some thoughts for 2024 and beyond.
If you got a big refund, consider reducing your withholdings so that you earn interest on that money during the year instead of giving the government an interest-free loan. If you are having to pay in a good bit (“a good bit” is a very relative term – some of my clients wince at paying an additional $1,000, and I have some clients having to pay hundreds of thousands of dollars), consider increasing your withholdings unless this was a very unique year.
I know your tax preparer/accountant is very busy but, please, for your sake ask her for input and suggestions on how to help you make or save money. It honestly can help to have an additional set of eyes reviewing your financial situation on a regular basis, and I don’t mind doing this for my clients. One suggestion, or “what if,” or “have you considered?” could end up making a tremendously positive impact on your financial and tax situation.
If you regularly donate money to charity and you have retirement accounts from which you take annual required distributions, consider “qualified charitable distributions.” QCDs make everyone happy. The IRS is happy because you met the required distribution, the charity is happy because it received money, and you are happy because you did not have to pay tax on the distribution.
If you are self-employed, you have a tremendous opportunity to save money on a pre-tax and/or post-tax basis. Traditional and Roth IRAs, 40(k)s, SEP IRAs, and SIMPLE IRAs are just a few of the potential solutions that could help you meet your financial goals. April is a great month to get started with these types of plans because you still have eight months in the year to get money into them. If you suffer from analysis paralysis or you tend to think yourself into a corner before taking any action, get started soon and seek professional advice.
Due to space constraints, in the future I will discuss strategies to create and enhance tax-free assets and income streams.
Gulf County resident Walter L. Woodrick is a Certified Financial Planner practitioner, and the author of two books. His website is WoodrickFinancial.com. You can text Walter at 850.724.1369. Securities and advisory services are offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. This information is not intended to be a substitute for specific individualized tax or legal advice. Individual tax or legal matters should be discussed with your tax or legal professional. 563650-1
Meet the Editor
David Adlerstein, The Apalachicola Times’ digital editor, started with the news outlet in January 2002 as a reporter.
Prior to then, David Adlerstein began as a newspaperman with a small Boston weekly, after graduating magna cum laude from Brandeis University in Waltham, Massachusetts. He later edited the weekly Bellville Times, and as business reporter for the daily Marion Star, both not far from his hometown of Columbus, Ohio.
In 1995, he moved to South Florida, and worked as a business reporter and editor of Medical Business newspaper. In Jan. 2002, he began with the Apalachicola Times, first as reporter and later as editor, and in Oct. 2020, also began editing the Port St. Joe Star.