If you made significant gifts to your children, grandchildren, or other heirs last year, it’s important to determine whether you’re required to file a 2024 gift tax return. And in some cases, even if it’s not required to file one, you may want to do so anyway.
Requirements to file
The annual gift tax exclusion was $18,000 in 2024 (increased to $19,000 in 2025). Generally, you must file a gift tax return for 2024 if, during the tax year, you made gifts:
That exceeded the $18,000-per-recipient gift tax annual exclusion for 2024 (other than to your U.S. citizen spouse),
That you wish to split with your spouse to take advantage of your combined $36,000 annual exclusion for 2024,
That exceeded the $185,000 annual exclusion in 2024 for gifts to a noncitizen spouse,
To a Section 529 college savings plan and wish to accelerate up to five years’ worth of annual exclusions ($90,000) into 2024,
Of future interests — such as remainder interests in a trust — regardless of the amounts, or
Of jointly held or community property.
Important: You’ll owe gift tax only if an exclusion doesn’t apply and you’ve used up your lifetime gift and estate tax exemption ($13.61 million in 2024). As you can see, some transfers require a return even if you don’t owe tax.
Filing if it’s not required
No gift tax return is required if your gifts for 2024 consisted solely of tax-free gifts because they qualify as:
Annual exclusion gifts,
Present interest gifts to a U.S. citizen spouse,
Educational or medical expenses paid directly to a school or health care provider, or
Political or charitable contributions.
But you should consider filing a gift tax return (even if not required) if you transferred hard-to-value property, such as artwork or interests in a family-owned business. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.
The deadline is April 15
The gift tax return deadline is the same as the income tax filing deadline. For 2024 returns, it’s April 15, 2025. If you file for an extension, it’s October 15, 2025. But keep in mind that if you owe gift tax, the payment deadline is April 15, regardless of whether you file for an extension. Contact us if you’re unsure whether you must (or should) file a 2024 gift tax return.
Social Security plays a crucial role in retirement planning, and understanding its complexities can make a significant difference in financial security. At the third annual Social Security Workshop, hosted by the Social Security Administration (SSA), attendees explored the ins and outs of Social Security benefits, eligibility, and enrollment. Whether you’re preparing for retirement or simply looking to understand how the system works, the insights from this session offer valuable takeaways.
Making the Most of the Social Security Enrollment Process
For those approaching retirement, the importance of applying for Social Security benefits online was emphasized. The process is streamlined and efficient, allowing applicants to manage their claims without the hassle of in-person visits. The AI companion was introduced as a tool that records and summarizes discussions, making it easier to reference key points later.
To navigate the system smoothly, attendees were encouraged to set up a my Social Security account. This online tool provides easy access to benefit estimates, earnings history, and personal records. Given the shift to an appointment-only model at Social Security offices, having an online account is more important than ever.
Looking ahead, attendees were invited to the next workshop session, set for March 11th, which will focus on Medicare Parts A and B—another essential component of retirement planning.
How the Social Security System Works
One of the biggest misconceptions about Social Security is that it functions like a personal savings account, where you get back exactly what you paid in. In reality, Social Security is designed to replace a percentage of a worker’s pre-retirement income. The actual benefit amount is calculated based on the highest 35 years of earnings subject to Social Security taxes.
Key takeaways:
Retiring early reduces your monthly benefit, while delaying retirement increases it.
The FICA tax, which funds Social Security and Medicare, is split between employers and employees.
Some workers may be exempt from paying the full FICA tax, depending on their employment status.
Earning Social Security Benefits: What You Need to Know
To qualify for Social Security retirement benefits, individuals must accumulate 40 credits, earned by working and paying into the system. Typically, this means working at least part-time for 10 years.
Social Security benefits are calculated based on lifetime earnings, adjusted for inflation and wage trends over time. If you retire early, your monthly check will be lower, while delaying retirement past your full retirement age can result in increased benefits.
A link to an online benefit calculator was provided, allowing individuals to estimate their future payments based on their earnings history.
When Should You Retire? Key Considerations
Retirement planning isn’t just about when you stop working—it’s about maximizing your benefits. Several age-based strategies were discussed:
Age 62: The earliest you can claim Social Security, but with a reduced benefit.
Full Retirement Age (FRA): Varies based on birth year; claiming at this age ensures 100% of your benefit.
Delayed Retirement (up to Age 70): Each year you wait beyond FRA increases benefits by 8% annually.
Choosing when to retire is a personal decision, but tools like the my Social Security online calculator can help individuals determine their best path based on earnings and financial goals.
Earnings Limits: How Working Affects Your Benefits
If you plan to continue working after claiming Social Security, you’ll need to be mindful of earnings limits. For those under full retirement age, the 2024 limit is $23,400. If you earn more, your benefits will be reduced by $1 for every $2 over the limit.
However, once you reach full retirement age, these limits disappear, and you can earn as much as you want without affecting your benefits.
Other important considerations:
Earnings limits apply to both individual and spousal benefits.
If you retire mid-year, only earnings from that point forward are counted.
If you become disabled before reaching full retirement age, you may qualify for both disability and retirement benefits.
Spousal and Survivor Benefits: Understanding Eligibility
For married and divorced individuals, spousal and survivor benefits can provide additional financial security. Key points covered included:
Claiming spousal benefits early may result in a reduced payout.
Divorced spouses can receive benefits under certain conditions.
The lump sum death payment is available to eligible survivors.
Understanding these rules can help couples and individuals strategize their claims for maximum benefit.
Recent Changes to Social Security
One of the most significant updates discussed was the Social Security Fairness Act, which has eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). While this is great news for many retirees, it was noted that the changes will take time to implement due to staffing shortages, with full implementation expected within a year.
Additional updates:
Those who never applied for benefits won’t have WEP and GPO rules applied retroactively.
The SSA encourages individuals to subscribe to their website for real-time updates on policy changes.
Setting up a my Social Security account is a great starting point. Additionally, the SSA website provides essential tools and resources for estimating benefits, tracking earnings, and planning for the future.
As retirement approaches, staying informed and planning ahead can make all the difference. Whether through workshops, online tools, or speaking directly with SSA representatives, there are many resources available to help individuals make the best decisions for their financial future.
You may wonder if you can claim itemized deductions on your tax return. Perhaps you made charitable contributions and were told in the past they couldn’t be claimed because you didn’t have enough deductions to itemize. How much do you need? You can itemize deductions if the total of your allowable itemized write-offs for the year exceeds your standard deduction allowance for the year. Otherwise, you must claim the standard deduction.
Here’s how we’ll determine if you can itemize or not for 2024 when we prepare your return.
Standard deduction amounts
The basic standard deduction allowances for 2024 are:
$14,600 if you’re single or use married filing separate status,
$29,200 if you’re married and file jointly, and
$21,900 if you’re a head of household.
Additional standard deduction allowances apply if you’re age 65 or older or blind. For 2024, the extra allowances are $1,550 for a married taxpayer age 65 or older or blind and $1,950 for an unmarried taxpayer age 65 or older or blind.
For 2025, the basic standard deduction allowances are $15,000, $30,000, and $22,500, respectively. The additional allowances are $1,600 and $2,000, respectively.
Don’t assume
Suppose you think your total itemizable deductions for 2024 will be close to your standard deduction allowance. In that case, spend some extra time looking at all your expenditures to make sure you’re not missing some itemized deduction items. In other words, don’t reflexively assume you can’t itemize for 2024 just because you didn’t for 2023.
In addition to charitable contributions, consider the following key expenses:
Mortgage interest. Check the 2024 Form 1098 for the exact amount of mortgage interest expense you paid. You can generally deduct interest on up to $750,000 of home acquisition debt that’s secured by your primary residence and one other residence, such as a vacation home. If you use married filing separate status, the limit is $375,000. If you took out a home equity loan and used the proceeds to buy or improve your primary residence or a second residence, that counts as home acquisition debt as long as it doesn’t put you over the $750,000/$375,000 limit.
State and local taxes. Add up the state and local income and property taxes you paid in 2024. If you have a mortgage, property taxes will be shown on the Form 1098 you receive from the lender. The maximum amount you can deduct for all state and local taxes combined is $10,000, or $5,000 if you use married filing separate status.
Instead of deducting state and local income taxes, you can choose to deduct general state and local sales taxes. Making that choice may pay off if you paid nothing or not much for state and local income taxes. You can use one of two methods to quantify your deduction for state and local sales taxes. Assuming you have the necessary records, you can deduct the actual amount of sales taxes you paid in 2024. Alternatively, you can opt to claim a sales tax deduction based on an IRS table. The optional deduction allowance is based on the state where you reside, your filing status, your income, and the number of your dependents. If you use the IRS table, you can add actual sales tax amounts for certain big-ticket items to the amount from the table. These items include:
Cars, trucks, SUVs and vans,
Boats and aircraft,
Motorcycles and off-road vehicles,
Motor homes, mobile homes or prefab homes, and
Materials to build or renovate a home.
Medical expenses. You can deduct qualified medical expenses you paid for 2024 to the extent they exceed 7.5% of your adjusted gross income. If you paid qualified expenses for a dependent relative, such as an elderly parent you support, include those expenses in your total. To deduct a dependent’s expenses, you must pay them yourself. You can’t count expenses that you simply reimburse your dependent person for. Eligible expenses also include qualified long-term care insurance premiums, subject to age-based limits.
Claim all deductions you’re eligible for
Gather all your records, and we’ll run the numbers when we prepare your tax return. Contact us if you have questions or want more information on this or any other tax subject.
Financial forecasting provides a roadmap to guide your organization on the path to success. Forecasts support strategic planning by helping you allocate resources efficiently, manage risks effectively, and optimize capital investments. However, today’s dynamic marketplace is uncharted territory, so you can’t rely solely on historical data. Reliable forecasts also consider external market trends and professional insights. Here are some tips to strengthen your forecasting models and help you avoid common pitfalls.
Determine the optimal approach
What’s the right forecasting method for your situation? The answer depends on several critical factors, including:
Forecast length. Short-term forecasts (that cover a year or less) often rely more heavily on historical data. These plans focus primarily on the organization’s immediate needs. Long-term forecasts require more qualitative inputs to account for uncertainties, such as market disruptions, economic shifts, and changing regulations and consumer behaviors. These plans are essential to support strategic decisions and attract funding from investors and lenders. The longer your forecast period is, the more likely internal and external conditions will change. So, short-term forecasts tend to be more accurate than long-term plans. Long-term forecasts may need to be updated as market conditions evolve.
Stability of demand. Industries with consistent sales patterns may be able to use straightforward historical data analysis. However, those with seasonal and cyclical fluctuations might need to incorporate techniques like time-series decomposition to adjust for peaks and downturns. Companies experiencing unpredictable demand might consider using advanced forecasting software that integrates real-time sales data and external variables to enhance accuracy.
Availability of historical data. Techniques such as exponential smoothing require at least three years of data to generate reliable projections. For businesses launching new products or entering new markets, qualitative forecasting methods that incorporate expert opinions and market research may be more effective.
Business offerings. Companies with a wide range of products and services may prefer simplified forecasting models. Conversely, those with a focused product line can achieve greater accuracy with more complex statistical models.
Relying on just one forecasting model can be problematic. What happens if the forecast model gets things wrong? It may be more prudent to use a combination of approaches tailored to individual products and locations. Considering the results from multiple forecasting approaches can lead to better outcomes, especially when managing inventory levels.
Implement advanced forecasting techniques
Businesses seeking greater forecasting accuracy can implement advanced techniques, such as:
Time-series analysis, which breaks historical data into trend, seasonal, and cyclical components to better understand patterns,
Regression models that identify relationships between financial variables to improve prediction accuracy,
Scenario planning that prepares best-case, worst-case, and expected forecasts,
Sensitivity analysis that determines which forecasting assumptions have the greatest impact on expected financial outcomes, and
Rolling forecasts that are continuously updated based on current data to provide greater flexibility and adaptability.
Increasingly, businesses are leveraging artificial intelligence and machine learning to enhance forecasting precision. These technologies analyze large datasets quickly, identify trends, and adjust predictions dynamically based on real-time changes. By integrating AI-driven forecasting tools, businesses can optimize their decision-making and gain a competitive edge.
Seek outside guidance
Financial statements are often the starting point for forecasts. Our accounting and auditing team can help ensure your historical data is accurate and then guide you through the process of developing reliable, market-driven forecasts based on your current needs. From developing realistic assumptions and reliable models to tracking forecast accuracy and updating for market shifts, we’ve got you covered. Contact us for more information.
Retirement is often viewed as an opportunity to travel, spend time with family, or simply enjoy the fruits of a long career. Yet the transition may bring a tangle of tax considerations. Planning carefully can help you minimize tax bills. Below are four steps to take if you’re approaching retirement, along with the tax implications.
1.Consider your post-career lifestyle
Begin by assessing what retirement might look like for you. For example, will you relocate to a different state or downsize by selling your home? Will you continue to work part-time?
Tax implications: Moving to a state with lower income or property taxes may stretch your retirement savings. If you sell your home and the capital gain exceeds $250,000 ($500,000 for married couples filing jointly), you’ll need to pay tax on the amount over the exclusion limit. And if you work part-time, your earnings could reduce your Social Security benefits (depending on your age) or push you into a higher tax bracket.
2.Assess your income sources
Social Security is a major income component for many retirees, and deciding when to start collecting benefits is crucial. The government will permanently reduce your monthly benefit if you begin collecting before your full retirement age. Conversely, if you delay benefits past your full retirement age (up to age 70), you’ll receive larger monthly payments.
Tax implications: Depending on your total income (including wages, retirement distributions, and taxable investment income), up to 85% of your Social Security benefits could be taxable. Proper planning can help you manage taxable income and potentially reduce or avoid higher taxes on benefits.
If you’re fortunate enough to have a pension, find out your payout options. Some pensions offer lump-sum distributions, while others offer monthly annuity payments.
Tax implications: Most pension income is taxable at ordinary income tax rates.
In addition to retirement accounts, you may have savings and investments in brokerage accounts that can supplement your income.
Tax implications: Capital gains and dividends may be taxed differently than ordinary income, potentially at lower rates. Strategic withdrawals from taxable accounts and retirement accounts can help you manage your overall tax liability.
3.Develop a retirement account withdrawal strategy
Once you turn 73, you must take required minimum distributions (RMDs) from most tax-deferred retirement accounts, such as traditional IRAs and 401(k)s. Failing to do so can result in hefty penalties.
Tax implications: RMDs are treated as ordinary income for tax purposes. If you don’t need them for living expenses, you might consider a qualified charitable distribution (QCD) to lower your taxable income. With a QCD, funds go directly from your retirement account to a qualified charity. They can count toward your RMD but aren’t included in your taxable income.
Distributions from Roth IRAs and Roth 401(k)s are generally tax-free (if holding-period requirements are met), making them valuable tools for reducing taxes in retirement. If you have traditional and Roth accounts, you might choose to take withdrawals from Roth accounts in years when you want to manage your tax bracket more carefully.
Tax implications: Roth accounts don’t require RMDs during the original owner’s lifetime.
4.Plan for health care expenses
Medical costs can significantly impact retirees. Medicare premiums, hospital visits, prescriptions, and potential long-term care are just some of the expenses that can eat into your retirement savings without careful planning.
Tax implications: Health Savings Accounts (HSAs) allow for tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. If you’re retiring soon and have a high-deductible health plan, maximizing HSA contributions can be a smart move. In addition, qualified medical expenses can sometimes be deducted if they exceed a certain percentage of your adjusted gross income (AGI).
Final thoughts
Retirement can span decades, and tax laws frequently change. By combining various withdrawal strategies and staying proactive about tax changes, you can tame the tax tangle. These are only some of the tax issues and implications. Contact us. We can help forecast tax outcomes under different scenarios and advise on strategies that complement your retirement goals.
