By: Brian Stidd, CPA, CVA, Owner of Stidd CPA

As 2025 approaches, tax planning is more important than ever. With recent changes in tax laws, inflationary pressures, and evolving financial circumstances, being proactive about your taxes can save you significant money. Whether you’re an individual taxpayer or a business owner, adopting smart strategies before year-end can make a big difference when tax season rolls around. Below are some key tax strategies for the balance of 2024 that will help you minimize your tax liability and make the most of the current tax landscape.

1. Maximize Retirement Contributions

Contributing to retirement accounts is one of the most effective ways to reduce taxable income while securing your financial future. Here are the key contribution limits for 2024:

– 401(k) Contributions: The contribution limit for 401(k) plans is $23,000 for 2024, with an additional catch-up contribution of $7,500 for individuals aged 50 or older. Contributions to traditional 401(k) plans are made pre-tax, reducing your taxable income.

– IRA Contributions: For 2024, the maximum contribution to an Individual Retirement Account (IRA) is $7,000, with a $1,000 catch-up contribution for those aged 50 and older. Contributions to a traditional IRA may be tax-deductible, depending on your income and whether you or your spouse is covered by an employer-sponsored retirement plan.

– SEP and SIMPLE IRAs: For self-employed individuals and small business owners, contributing to a Simplified Employee Pension (SEP) IRA or a Savings Incentive Match Plan for Employees (SIMPLE) IRA can significantly reduce taxable income. SEP IRA contributions can be as high as 25% of your compensation, up to a maximum of $69,000.

2. Leverage Health Savings Accounts (HSAs)

If you’re enrolled in a high-deductible health plan (HDHP), contributing to a Health Savings Account (HSA) is a tax-efficient strategy. HSAs offer a triple tax benefit: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free.

– For 2024, the HSA contribution limit is $4,150 for individuals and $8,300 for families, with an additional $1,000 catch-up contribution for individuals aged 55 or older.

– HSAs are an excellent way to save for future healthcare expenses while lowering your taxable income. Contributions can be made up until the tax-filing deadline (April 15, 2025) to count toward your 2024 taxes.

3. Take Advantage of Capital Gains and Loss Harvesting

Capital gains tax planning is crucial for investors with taxable investment accounts. If you’ve experienced significant gains in your portfolio, consider these strategies:

– Harvest Capital Gains: If your income places you in the 0% capital gains tax bracket (for single filers with income up to $44,625 or married filers with income up to $89,250), consider selling investments with gains to avoid paying federal taxes on those gains.

– Harvest Capital Losses: If you’ve experienced losses in your investments, selling those assets can help offset capital gains. This strategy, known as tax-loss harvesting, allows you to offset an unlimited amount of gains and deduct up to $3,000 of excess losses against other income. Losses exceeding this amount can be carried forward to future tax years.

4. Charitable Contributions

Making charitable donations is not only a way to give back but also a powerful tax-saving tool. Under current law, you can deduct charitable donations if you itemize your deductions. However, there are ways to enhance the tax benefits of charitable giving:

-Bunching Donations: If your itemized deductions do not exceed the standard deduction ($14,600 for individuals and $29,200 for married couples in 2024), consider bunching several years’ worth of charitable donations into a single year. This can push your deductions above the standard deduction threshold, allowing you to benefit from itemizing.

– Donor-Advised Funds: If you want to make a large charitable contribution now but spread the donations to specific charities over time, consider contributing to a donor-advised fund (DAF). You can take the tax deduction in the year you contribute to the DAF, even if the money is not distributed to charities until later.

5. Review Tax Credits and Deductions

Certain tax credits and deductions can significantly reduce your tax bill. Make sure you’re taking full advantage of the following:

-Child Tax Credit (CTC): For 2024, the Child Tax Credit is $2,000 per qualifying child under the age of 17. The credit begins to phase out for single filers with income over $200,000 and joint filers with income over $400,000.

-Earned Income Tax Credit (EITC): The EITC is a refundable credit for low- and moderate-income earners. For 2024, the maximum EITC is $7,830 for a family with three or more qualifying children.

-Energy Efficiency Credits: If you plan to make energy-efficient improvements to your home, such as installing solar panels, energy-efficient windows, or insulation, you may be eligible for the Residential Clean Energy Credit. This credit allows you to claim up to 30% of the cost of qualifying home improvements through 2032.

-Education Credits: If you’re paying for higher education expenses, the American Opportunity Tax Credit (AOTC) provides up to $2,500 per student for qualified education expenses. The Lifetime Learning Credit offers up to $2,000 per tax return for education expenses at eligible institutions.

6. Consider Estate and Gift Tax Planning

If you’re concerned about estate taxes or want to pass on wealth to family members, 2024 offers opportunities to gift assets while reducing your taxable estate. The annual gift tax exclusion is $18,000 per recipient. You can gift this amount to as many individuals as you like without triggering any gift tax or affecting your lifetime estate and gift tax exemption (set at $13.61 million in 2024).

7. Use Tax-Deferred Investment Accounts

If you’ve maxed out your 401(k) and IRA contributions, consider tax-deferred investment vehicles, such as 529 Plans for education savings or tax-deferred annuities. These accounts allow your investments to grow without being taxed until funds are withdrawn, potentially lowering your overall tax burden.

8. Roth IRA Conversions

If you expect your income to be lower in 2024 or foresee higher taxes in the future, consider converting a portion of your traditional IRA to a Roth IRA. Although you’ll pay taxes on the amount converted now, future withdrawals from the Roth IRA are tax-free, provided you meet certain conditions. This strategy is particularly useful if you expect to be in a higher tax bracket later or want to leave tax-free income to heirs.

9. Plan for Changes in Tax Laws

While many provisions from the Tax Cuts and Jobs Act (TCJA) are still in effect, some may expire or change in the coming years. It’s essential to stay updated on potential legislative changes that could impact your tax planning. Working closely with a CPA can help you navigate these uncertainties and optimize your tax strategies for future years.

Conclusion

The tax landscape in 2024 presents several opportunities for taxpayers to reduce their liabilities and maximize savings. By strategically contributing to retirement accounts, leveraging tax credits, utilizing charitable giving, and considering capital gains planning, you can minimize the taxes you owe and keep more of your hard-earned money. Consulting with a CPA is the best way to ensure you’re taking full advantage of these tax-saving opportunities and staying compliant with IRS regulations.

If you have any questions or would like personalized advice, contact your CPA to discuss the best tax strategies for your specific situation.

Brian Stidd has nearly 20 years of experience in both public accounting and
the private sector. His experience in both public and private sectors gives
him a unique ability to assist businesses. Brian specializes in business and
individual tax planning, advisory and preparation as well as general business
accounting and advisory.
To learn more or get in touch, visit stiddcpa.com

By: Charles Amodio, CPA, CFF, MAFF, MBA, Partner at FAZ Forensics

Business interruption, is the temporary cessation of business operations on either a partial or complete basis, as the result of a specific and sometimes catastrophic event. In terms of insurance coverage, the loss event is the result of a covered peril, i.e., fire, hurricane, or tornado.

Often, falling under business interruption coverage are separate components, such as the insured’s business income loss as well as coverage for extra expenses incurred to mitigate the loss. The business income loss, which at times is used interchangeably with business interruption, is the portion of the coverage that indemnifies the insured for the loss business income which the insured would have earned but for the loss. The term “but for the loss” is an important concept to consider for a moment, as it is often misunderstood and becomes a point of contention.

The insurance contract between the insured and the insurer is designed to make the insured whole, and to not unduly enrich the insured through an insurance recovery. Often, an insured operates under a faulty assumption that the insurer will pay them for the lost profits during the period of interruption, less any actual profit or loss, the difference being the recoverable loss. This is incorrect as the coverage is for actual loss sustained; accordingly, deductions must be taken for certain expenses that were not incurred during the loss period. The concept of discontinued expenses is sometimes an area that is difficult for some to understand.

The forensic accountant should examine the insured’s profit and loss (P&L) statement for a period of time ending prior to the date of loss. The closer the period end date of the P&L statement is to the date of the loss, the more timely the information will be and a better metric to help in the determination of the loss.  The fixed or variable expenses are analyzed, and the variable expenses (those that vary directly with sales), are segregated from fixed expenses to determine the discontinued expenses. These expenses are typically expressed as a percentage of sales, although in some instances, averages are also used.

The variable expenses attributed to the lost sales during the loss period become the basis for the discontinued expenses that are deducted to calculate the business income loss, cost of sales being one of the best examples of such an expense.  In some situations, the line between a fixed or variable expense is not straightforward, as these expenses have both fixed and variable components. These semi-variable expenses, depending on their materiality to the insured’s operations as well as the claim, often require additional analysis. An insured’s payroll is an example of one such item that requires further scrutiny, specifically to determine the divide between hourly and salaried employees.

Another point of contention can be the issue of indemnity period versus loss period.  Specifically, if there is a difference between the length of time taken or should have been taken to repair the damaged property to pre-loss condition, or the condition of the property, but for the loss. Careful consideration should be taken in regard to any potential improvements and betterments to the damaged location during the restoration period.  In this instance, if the length of time to complete the repairs exceeds the period of time it should have taken, either because of the improvements or because the insured has not taken measures to mitigate the loss, the indemnity period would be shorter than the actual loss period, and the insured’s recovery would be based on the shorter period.

In regard to the measurement of the insured’s actual loss sustained, the forensic accountant should be cognizant of the insured’s ability to mitigate their loss either during the loss period or shortly thereafter. Specifically, the insured may be able to mitigate the lost sales either through a resumption of partial operations at the damaged location or temporary location. The insured may also shift production to an undamaged portion of a manufacturing facility, add additional shifts, or temporarily outsource production to a competitor. The insured may be able to make up a portion its lost sales for the rescheduling of appointments, in the case of a professional service provider.

Often, an insured has additional coverage for the reimbursement of certain expenses that are incurred as a direct result of the loss. Common examples of such an expense are the additional rent incurred to shift production or sales to a temporary location and the rental of equipment, such as portable generators, to continue partial operations at the insured’s affected location.  The extra-expense coverage reimburses the insured for the expenses incurred during the loss period which exceed normal operating costs. Consideration should be given to the extent and type of expenses for which the insured is reimbursed.  A determination must be made to ensure that the expenses are actually “extra” and are not ordinary to everyday operations of the business. An example of this would be the differential between employee overtime that exceeds normal pre-loss overtime, or the payroll of salaried employees incorrectly included in extra expenses. 

As a forensic accountant, communication is essential to the amicable settlement of the loss.  Although claims adjusters and forensic accountants have handled numerous business interruption claims, this is typically the first experience for many insureds.  Therefore, the forensic accountant needs to take the time to make sure the insured fully understands the process.  This level of communication on the front end will foster a smoother settlement process.   

At FAZ Forensics, we handle property and casualty claims resulting from fires, auto accidents, water damage, mechanical breakdown, power outages, fraud, terrorist attacks, employee theft, natural disaster and more. Our insurance experience has allowed us to help successfully settle claims involving coverage issues and circumstances such as business interruption, inventory losses, loss of rents, subrogation, coinsurance and employee theft claims.  

The insurance community relies on our team of experts on insurance cases for our extensive knowledge of commercial and no-fault insurance concepts and contracts and our familiarity with both first-party and third-party liability insurance claims. In addition, we have worked with adjusters, claims representatives, insureds, claimants, attorneys and public adjusters to successfully resolve thousands of complex insurance claims.  For claims not settled amicably, we have a thorough understanding of, and participation in, the appraisal process as both appraisers and umpires, and have testified as experts at arbitration and mediation. 

Summer is a wonderful season where kids enjoy a break from school, families take vacations, adventurers check things off their bucket-list, and some businesses enjoy their busiest time of the year. It is certainly an exciting time, but as we close the chapter of Summer and welcome in the Fall, we are excited for the opportunities that the changing of seasons will bring.

Here at the ARCC we don’t like to assume anything, but we do notice patterns, and the autumn months seem to invite their fair share of ribbon cuttings, fundraisers, workshops, and showcases. The Adirondack Regional Chamber of Commerce has been hard at work planning a wide array of events that will inspire, educate, and motivate attendees to finish out 2024 strong.

Annual ARCC Business Awards

For over 30 years, the ARCC has been recognizing the incredible businesses that serve our region at our annual business awards celebration. The categories may have changed over the years, and businesses come and go, but one thing remains the same – this event brings the community together for a morning of celebration and gratitude. 

This year, we are enthusiastically recognizing 44 nominees in 7 categories! This is certainly a record number of nominees in recent memory. The categories cover large and small businesses & nonprofit organizations, professional businesses, rookie businesses, and a community champion business. What makes this event extra special is during the event remarks attendees get the opportunity to learn a little bit about each nominee before the winners are announced. Please join us for this celebratory event on October 3^rd, from 7:30 – 10:00 a.m. at The Queensbury Hotel in downtown Glens Falls.

Get ready to learn at these workshops & panel discussions

Learning is a lifelong process, and as the world changes around us we are always looking for opportunities to continue providing educational events for our business community. The ARCC is collaborating with members to provide some incredible workshops and panel discussions to satisfy any learner’s appetite.

The Saratoga County Chamber of Commerce has partnered with the ARCC for a workshop exploring how a sense of belonging in companies and communities affects talent recruitment, workforce retention, and community investment. We feel this event is really for everyone and are looking forward to the ripple effect of its impact in our business community. Attendees will learn practical insights and best practices from expert presenters and panelists at this half-day workshop about building belonging in your company and community. The workshop will also feature a Keynote Discussion on: “Reimagining Talent in Modern Workplaces” with Netta Jenkins, CEO of Aerodei, author, and leading authority on global inclusivity. Committed panelists and presenters include representatives from: GlobalFoundries, Saratoga Hospital, Warren County EDC, SUNY Adirondack, Saratoga EDC, North Country Janitorial, Six Flags Great Escape, Arrow Financial, Elite 9 Talent Solutions, Adirondack Studios, and more to be announced. This dynamic event will be held on October 9^th from 8:00 – 11:30 a.m. at the SUNY Adirondack Saratoga Campus in Saratoga Springs. Pre-registration is required, and space is limited, so don’t sleep on this one!

For our marketing professionals, and those looking to learn more, we have partnered with Trampoline Design, an award winning NYS WBE full-service marketing & design agency with 20+ years’ experience, to offer a panel discussion on “Rebrand vs Refresh”. How do you know when it is time to rebrand versus refresh a campaign? Perhaps this is a question on many people’s minds, and the team at Trampoline is ready to answer this question and more. Attendees will leave this session with a self-survey list gauging their brand, tactics for not becoming complacent, tips for finding the right partner, and how to prepare for a rebrand or a campaign overhaul. Panelists include: Trampoline Design Partner/Creative Direction Derek Slayton, Partner/Business Management Paula Slayton, Business Development Amanda Magee, and Brand Strategy Sean Magee. We are excited about this one, and hope you are too! This workshop will be held on October 10^th from 8:30 – 10:00 a.m. at the StoredTech Collaboration Center in Queensbury.

Perhaps you are looking for more information on how to grow your business in 2025 and beyond. We may have the event for you. The ARCC has partnered with TD Bank to host a two-part panel discussion on access to capital strategies for growth. This discussion features financial leaders and strategists that will focus on resources available to help grow your business. Panelists for the Access to Capital session include: Joseph Bailey, VP Small Business Relationship Manager with TD Bank, Nicole Deyo, Vice President of Pursuit, and Jamie Cecilia, Loan Officer with AEDC. Panelists for the Strategies for Growth session include: Jeffrey Boyce, Upstate Branch Manager of the SBA, Greg Chanese, Certified Business Advisor with NY Small Business Development Center, and Brian Rollo, Owner of Brian Rollo Consulting Group. Sound interesting? Please join us on October 23^rd from 8:00 – 10:30 a.m. at The Queensbury Hotel in Glens Falls.

Annual ARCC Business Expo

The ARCC Business Expo is an excellent way to learn about the businesses in our region, meet new people, and reconnect with old friends. We literally take over the first floor of The Queensbury Hotel with 85+ exhibitors that feature product demonstrations, food & beverage samples, resources and so much more. This is definitely an event you do not want to miss! Bring plenty of business cards and prepare to network the night away. This event is free to attend, with fees to exhibit, and will take place on November 6^th from 4:00 – 7:00 p.m. at The Queensbury Hotel.

Mixers & Ribbon Cuttings

The networking opportunities continue as the ARCC hosts mixers and ribbon cutting celebrations throughout the end of the year. Our mixers draw anywhere between 75-200 people and are hosted at different locations allowing our members an opportunity to check out new venue spaces, sample delicious food & drink, and make those lasting connections that ensure our business community grows and thrives. Plus, they are kind of fun! And if you’ve never been to an ARCC ribbon cutting, you are missing out. These celebrations end up turning into mini-mixers as we celebrate our members while mingling with new and old friends. You just never know who you are going to meet at an ARCC ribbon cutting.
If you take anything away from this piece, it will hopefully be that the ARCC is here to support your business with exciting offerings to propel you through the end of 2024 and beyond. Get back to business with the Adirondack Regional Chamber of Commerce. All our upcoming events can be found at www.adirondackchamber.org/events.