Gratitude and Reflection in the World of Accounting

It's that special time of year again where we find ourselves pausing for gratitude and reflection. As a CPA, my thoughts naturally turn to the incredible professional tools I have at my disposal. These tools empower me to help clients save money, plan ahead, and feel confident as tax season approaches. Let me share four things as a CPA that I'm truly thankful for.

The Standard Deduction

One of the things I appreciate most is the simplicity and savings offered by the standard deduction. For single filers, it's $15,750; for married couples filing jointly, it's $31,500; and for heads of household, it's $23,625. If itemized deductions don't stack up to these amounts, choosing the standard deduction is simply a no-brainer. I once worked with a family who was thrilled to keep more of their hard-earned money by opting for the standard deduction instead of itemizing.

Retirement Account Contributions

Retirement accounts like IRAs and 401(k)s provide amazing opportunities for clients to secure their futures. With IRA contributions capped at $7,000 (or $8,000 if you're lucky enough to be 50+), and 401(k) limits at $23,500 (or $31,000 if age 50+), the potential for growth is substantial. And looking ahead to 2025, there's the cool enhanced catch-up contribution for those aged 60 to 63, another smart benefit to maximize. Whether it's an anecdotal story about a client's Roth IRA success or discussions on the benefits of traditional versus Roth, these contributions are tools we're grateful for.

Health Savings Accounts (HSAs)

HSAs are like the trifecta of economic efficiency. For someone with individual coverage, you can contribute $4,300, while family coverage allows for $8,550. Plus, there's an extra $1,000 catch-up for those over 55. These accounts aren't just flexible; they offer a triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses. The potential tax savings are incredible, and many clients feel liberated knowing their medical expenses are covered.

The Child Tax Credit (CTC)

Finally, the Child Tax Credit is another boon for families. It offers up to $2,200 per qualifying child under 17, with up to $1,700 possibly refundable. This can be a significant boon, especially for families operating close to the phase-out thresholds of $200,000 for single filers and $400,000 for joint filers. I recall a relieved parent who found this credit gave them financial breathing room right when they needed it. As we wrap up this season of thankfulness, I encourage everyone to evaluate these opportunities before the year closes. If aiming to maximize your benefits piques your interest, always feel free to reach out for professional guidance—I'd be delighted to help steer you towards your financial goals with a friendly and approachable touch.