Page 125 - South Mississippi Living - January, 2025

FOR 2025
MAXIMIZE RETIREMENT CONTRIBUTIONS
Contributions to retirement accounts such as a 401(k) or IRA can lower taxable income. The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan, is increased to $23,000, up from $22,500. The limit on annual contributions to
an IRA increased to $7,000, up from $6,500. The IRA catch-up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost-of-living adjustment but remains $1,000 for 2024.
KEEP TRACK OF DEDUCTIONS AND CREDITS
Make a list of potential deductions
and credits you may qualify for, such as the Earned Income Tax Credit (EITC), education-related credits, or deductions for medical expenses. Don’t overlook lesser-known deductions like home office expenses if you work remotely or energy- efficient home improvement credits.
CONSIDER ELECTRONIC FILING
Filing electronically can save time and reduce errors compared to paper filing. The IRS typically processes e-filed returns faster, which means quicker refunds. Many taxpayers are also eligible for free filing software provided through the IRS Free File program.
AVOID LAST-MINUTE FILING
Filing early not only reduces stress but also minimizes the risk of identity theft. Scammers may attempt to file fraudulent returns using stolen information. Submitting your return early can help safeguard your refund.
SEEK PROFESSIONAL ADVICE
If your financial situation is complex, consider hiring a tax professional or CPA. Their expertise can help you identify deductions, avoid costly errors, and optimize your refund. Many professionals offer consultations to address specific tax concerns.
story by Kelsey Sunderman-Foster
By following these tips, you can navigate the 2025 tax season with confidence. Planning ahead and staying informed will ensure a smoother, less stressful experience when it’s time to file.
SOUTH MISSISSIPPI Living | www.smliving.net January 2025 | 125