As the year winds down, it’s the perfect time to take steps that could save you money come tax season. Whether you’re looking to claim credits for childcare, education, retirement savings, or even home improvements, planning ahead can put cash back in your pocket and help you meet your financial goals. Here’s a friendly guide to some of the most valuable tax credits for 2024 and what you can do now to maximize your savings.
Earned Income Tax Credit (EITC)
What to Do: Ensure you have earned income from wages, self-employment, or other qualifying sources. Keep accurate records of your income and dependents.
Tip: Even if your income is low, file a tax return to claim this refundable credit—it could mean a refund even if you didn’t pay taxes.
Child Tax Credit (CTC)
What to Do: Ensure your children have valid Social Security numbers before December 31, 2024. Keep documentation like birth certificates, school records, and proof of residency.
Tip: If filing separately, coordinate with your co-parent on who will claim the credit.
Child and Dependent Care Credit
What to Do: Pay for childcare or dependent care expenses by December 31, 2024. Obtain your childcare provider’s Tax ID (EIN or SSN) and keep payment records.
Tip: If your income might disqualify you next year, consider prepaying for services delivered in 2025 to maximize this year’s credit.
Education Credits (AOTC & LLC)
What to Do: Pay qualified education expenses (tuition, fees, books) by year-end. Ensure your school issues a Form 1098-T and confirm eligibility.
Tip: The AOTC is only available for the first four years of higher education.
Saver’s Credit for Retirement Contributions
What to Do: Contribute to a 401(k), IRA, or similar account by December 31, 2024. For IRA contributions, you have until April 15, 2025, but set up the account before year-end.
Tip: Even small contributions can make you eligible for this credit.
Premium Tax Credit (PTC)
What to Do: Enroll in a Health Insurance Marketplace plan during open enrollment. Report income changes to adjust premium credits.
Tip: Keep Form 1095-A as proof of your premiums.
Adoption Credit
What to Do: Complete the adoption process or incur qualifying expenses before December 31, 2024. Maintain detailed records of adoption-related costs.
Residential Energy Credits
What to Do: Make energy-efficient home improvements (e.g., insulation, HVAC upgrades) before year-end. Install renewable energy systems like solar panels or wind turbines.
Tip: Check eligibility for maximum credit benefits and keep receipts and certification statements.
Electric Vehicle (EV) Credit
What to Do: Purchase a qualifying electric or plug-in hybrid vehicle before December 31, 2024. Verify the vehicle qualifies for the federal credit using the IRS-approved list.
Health Savings Accounts (HSA) & Flexible Spending Accounts (FSA)
What to Do: Contribute to your HSA by December 31, 2024, up to $4,150 (individual) or $8,300 (family). Use FSA funds before the deadline or plan grace period.
Tip: Keep receipts for all qualified medical expenses.
How Cheever Law Can Help
At Cheever Law, we believe that tax planning is a key part of your overall financial health. Through our Life & Legacy Planning process, we help you integrate tax strategies into your larger estate and financial plan. Whether you’re adopting a child, upgrading your home, or planning for retirement, we can guide you toward informed decisions that align with your family’s goals and values. Ready to make the most of these opportunities? Schedule a Life and Legacy Planning Session today to ensure your financial choices benefit you now and for generations to come.