1.) 1099 Updates
Tax season is here! If you have a Schwab account, your Form 1099 Composite should already be on its way. Schwab sent the final batch of these forms in late February, so check your mail or online account if you haven’t received it yet. Keep in mind that corrections to these forms are issued weekly through March. Additionally, if you’re using TurboTax to file, we are happy to help guide you through the process. Reach out to us with any questions to ensure everything is handled smoothly.
2.) Making estimated tax payments easier
When with your CPA (or self-preparing), please review the following
For Estimated Taxes in 2025:
- For clients age 73+: Please do not set up estimated taxes. We can assist you in sending the total estimated amounts from your RMD to the US Treasury and State Comptroller in lieu of you making estimated payments. (If you do not have an RMD, please see below)
- For clients under age 73: Please ask your CPA to sign you up for auto-debits for your quarterly estimated taxes. We will then send the exact amount from your Schwab account to your checking account a few days before each quarterly payment. (April 10, June 10, September 10, and January 10.)
- Please have your CPA send us (through our shared secure Box portal) a copy of your 2024 tax return when completed.
3.) Qualified Charitable Distributions (QCD)
If you have sent part of your RMD to charity (QCD), please alert your tax advisor of the total amount donated. This will otherwise not be reflected on the 1099R provided by Schwab.
What is a QCD? QCDs let individuals aged 70½ or older donate up to $100,000 per year directly from an IRA to a charity, keeping that amount out of taxable income. If you’re 73 or older and required to take RMDs, using a QCD can help meet that requirement while also lowering your tax bill. This strategy works best for those who don’t need their full RMD for living expenses and want to support charitable causes.
4.) 2024 ROTH IRA Contributions
If your adjusted gross income was under the threshold ($240k married filing joint, $160K filing Single) to contribute in 2024, you should consider contributing to a Roth IRA. For 2024, the contribution limit is $7,000 for those under 50 and $8,000 for those 50+. Contributing to a ROTH IRA is especially beneficial for those looking to grow tax-free savings for the future. The deadline to do this is April 15th. Before contributing, please talk with your tax advisor or us.
5.) HSA and Dependent Care FSA
- You are not too late to contribute to a Health Savings Account (HSA) for 2024 if your employer does not offer one and you had a high deductible health plan in 2024.
- What is an HSA? Available for those with high-deductible health plans (HDHP). Offer tax-deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses.
- 2024 Contribution Limits: $4,150 (individuals), $8,300 (families), plus $1,000 catch-up for 55+.
- 2025 Contribution Limits: $4,300 (individuals), $8,550 (families), plus $1,000 catch-up for 55+.
- Funds roll over year to year. Check with your HR for employer options; Fidelity is a good option if your employer does not offer an HSA.
Employer Based Benefits for 2025: (These are plans that you must contribute to through your employer)
- Dependent Care FSAs: Allow pre-tax savings for childcare expenses, up to $5,000 per household.
- Must be used within the calendar year (no rollover).
- Health Savings Plan (HSA)
- Eligibility Reminder: Must be enrolled in a High Deductible Health Plan (HDHP) to contribute.
- Last-Month Rule: If covered by an (HDHP) on Dec 1, you can contribute the full annual limit.
- Contributions allowed until tax filing deadline (typically April 15).
- Contributions made between Jan 1 and tax deadline can be applied to the current or prior tax year.
Be well and have a wonderful week!
