Preparing for Tax Season: Insights from Neely’s Accounting Services

As the crisp air of October settles in, many people in Roanoke, Virginia, might still be enjoying the last remnants of fall. However, tax experts are quick to remind us that the upcoming tax season is just around the corner. With changes on the horizon and a need for preemptive planning, it’s time for individuals and small business owners alike to start their preparations.

The Importance of Early Preparation

According to Charles Neely, CEO of Neely’s Accounting Services, getting a head start on tax-related matters is crucial. “While tax season officially begins in January, you should start getting ready now,” he emphasizes. For individuals, understanding and preparing for changes in tax laws, deductions, and other financial implications can be the key to a smooth filing process.

Upcoming Changes in Standard Deductions

For those filing their taxes in the upcoming years, it’s important to note significant changes to standard deductions. For the 2025 income to be filed in 2026, the standard deduction amounts have been set at $30,000 for married couples and $15,000 for single filers. These adjustments reflect the ongoing impact of inflation on taxpayers and highlight the necessity for future tax planning.

Tax Bracket Adjustments

Moreover, as we look ahead to 2024, taxpayers should be aware that tax brackets will experience a 2.8% increase. This development is largely a response to inflation—a factor that has been affecting households across the nation. By understanding these increases, taxpayers can plan their incomes and financial strategies accordingly to minimize their liabilities.

Virginia Filings Extension

For residents of Virginia, there may be additional considerations in the form of potential extensions on state tax filings due to recent circumstances surrounding Hurricane Helene. Governor Glenn Youngkin has indicated that specific provisions may be made, though detailed dates and parameters remain to be confirmed. Neely encourages individuals to remain vigilant about these updates to optimize their filing strategies.

Quarterly Estimates and Professional Guidance

Taxpayers should pay particular attention to their quarterly estimates, especially as the January 15 deadline approaches. Neely advises those who have not yet made their quarterly estimates to consult with a tax professional promptly. “You need to make an appointment with your tax professional to determine if you need to make that estimate so you don’t end up paying the government interest and penalties for underpayment,” he warns.

Important Reporting for Small Business Owners

For small business owners, there are additional compliance requirements that could result in significant penalties if overlooked. As part of the IRS’s efforts to combat fraud, small business owners must report beneficial ownership information. If they fail to complete this documentation, they could face a hefty fine of up to $10,000.

Neely stresses the importance for all small business owners, regardless of their industry—be it landscaping, plumbing, or even direct sales—to comply with this regulation. “It’s imperative because there’s a fine if you don’t do it,” he states. This reporting requires declaring all owners, including silent partners, underscoring the IRS’s commitment to transparency.

Perspectives from Local Business Owners

Interestingly, some local business owners view the reporting requirements as a positive step towards legitimizing their businesses. Terry Baucom, owner of B&D Comic Shop, reflects on the importance of having systems that ensure accountability and reduce the prevalence of scams. “Anytime you have something that will legitimize your own business, I think it’s helpful for everyone,” he notes.

Baucom’s insights highlight a growing sentiment among local entrepreneurs about building trust and security within the business community.

Reporting Deadlines

For those who may overlook these requirements, awareness of the deadlines is critical. If your company was created before January 2024, you have until January 1, 2025, to file your beneficial ownership report. However, companies established in 2024 must file within 90 days of formation.

Conclusion

With the tax season fast approaching, planning and preparation are more important than ever. Staying informed about changes in deductions, tax brackets, and compliance requirements can greatly alleviate the stress associated with tax filings. Working with professionals and ensuring that you adhere to all regulations can safeguard you against potential penalties and help you optimize your financial standing for the year ahead. As we move closer to tax season, taking proactive steps now will yield benefits when it’s time to file your returns.