Did You Overfund a Section 529 Plan? Consider a Roth IRA Rollover

Section 529 college savings plans are a great way to help pay for a child’s or other family member’s college education.

Contributions are not federally tax-deductible (they are deductible in many states), but they grow federally tax-free and can be withdrawn tax-free to pay for higher education expenses (up to $10,000 can also be withdrawn tax-free to pay for K through 12 school tuition or to pay off school loans).

But what happens if you establish and fund a Section 529 college savings plan for a child, grandchild, or other family member and he or she doesn’t use all the money or decides not to go to college at all? What do you do with the money in an overfunded 529 plan?

Late Election for an LLC Using Revenue Procedure 2013-30

If an LLC misses the deadline to file Form 2553 to elect S corporation status, it may still be possible to make a late election—including a late entity classification election—if the entity can demonstrate that the failure to file on time was due to reasonable cause. To qualify for retroactive relief, the request must be submitted within 3 years and 75 days from the effective date specified on Line E of Form 2553.

Claiming the Home Office Deduction in 2024

As remote work continues to be a norm for many professionals, the Home Office Deduction remains a relevant tax benefit—though it’s limited in scope. For tax year 2024, the deduction is available only to self-employed individuals, independent contractors, and gig workers who use part of their home exclusively and regularly for business purposes. Employees who receive W-2 wages are not eligible for the deduction, even if they work remotely full time, due to changes under the 2017 Tax Cuts and Jobs Act.

Retroactive to 2024 Tax Deduction Ideas

1. Make a deductible IRA contribution (tests apply) of up to $6,500 per person ($7,500 if over 49) by April 15, 2025 toward 2024 and deduct it in your 2024 return.
2. For individuals with qualified health savings plans, make a health savings account deposit of up to $3,850 single or $7,750 for family coverage by April 15, 2025 towards 2024 and deduct it in your 2024 return.

Year-End Tax Planning Tips to Save You Money

As the year draws to a close, it’s a great opportunity to take steps that can help you save on taxes. Consider these smart financial moves before December 31st:

Retirement & Savings

Several key changes have been made to retirement savings rules that could impact your planning. Here’s a summary of what’s new:

Tax Implications of Side Hustles and Gig Work

With the rise of the gig economy, more individuals are earning extra income through freelance work, rideshare driving, online sales, or other side hustles. While this additional income can be a great financial boost, it also comes with tax responsibilities. The IRS considers this self-employment income, which means it must be reported—even if you don’t receive a 1099 form.

2024 Energy-Efficient Home Tax Credits: Save on Taxes While Going Green

Homeowners looking to make energy-efficient upgrades in 2024 can benefit from a range of expanded federal tax credits thanks to the Inflation Reduction Act. The Energy Efficient Home Improvement Credit allows taxpayers to claim 30% of the cost of eligible upgrades—such as insulation, energy-efficient windows and doors, heat pumps, and electrical panel upgrades—up to a maximum of $1,200 per year. For heat pumps and certain other systems, the limit increases to $2,000 annually, making it more affordable to go green.

Health (FSA, HSA, HDHP)

Health FSA (Flexible Spending Account):

• 2023 contribution limit = $3,050, up from $2,850
• Carryover up to $610 into the next plan year (if offered by your employer)

Tax Considerations After the Loss of a Loved One (2023)

If you lost a loved one in 2023, there are several important tax filings and estate rules to be aware of. Here’s a breakdown to help you navigate the process:

Estate Value and Estate Tax

The total fair market value (FMV) of all assets owned by the deceased must be calculated as of the date of death, before any deductions are applied.