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Paralympics 2024: Proactive Tax Strategies for College and Pro Athletes

Hey, athletes! As you shine on the Paralympic stage, don’t let taxes steal the spotlight. With Name, Image, and Likeness (NIL) earnings rolling in, and your Olympic Medal monies piling up, understanding tax savings is your new game plan. Here’s the deal—all your money is taxable. Yep, you owe the IRS. But don’t sweat it; we’re here to help you keep more of your hard-earned cash in your pockets!

🎾For College Athletes

Set Up an LLC for Tax Savings
Setting up an LLC isn’t just for businesses. It’s a smart move, we have our athlete clients setup too. This helps to separate your personal finances from your athletic business income streams. And allows our team the option to elect your LLC with the IRS to file as an S-Corp, potentially saving you thousands of dollars in unnecessary self-employment taxes. Think of your own LLC as your secret weapon for keeping more in your pocket.

Track Your Expenses Like a Pro
Training, travel, equipment—these are just a few expenses that can lower your taxable income.

There are many apps to help separate expenses if you run everything through one account. However, if you want months to categorize things, will you remember that one meal where you talked business?

Keeping detailed records is like nailing that perfect routine—essential for reducing your taxable income.

So, we always suggest keeping a separate business checking and credit card to help you identify what is personal and business when you have time in your business schedule to finally categorize things. Or, if you just want a CPA team to help with this our amazing accountants are always ready to help. With a CPA on your team, you’ll know exactly what counts as a deductible expense.

Plan for Self-Employment Taxes
Having business taxable income likely mean you’re paying Social Security and Medicare taxes payroll taxes. Not fun! With some proactive tax planning – before December 31^st – you can potentially avoid parting ways with your cash to the IRS. Our team stays on top of this for our monthly clients so you’re not overpaying these pesky FICA self-employment taxes every year.

🏅For Professional Athletes – Mastering Your Tax Strategy

You’ve made it to the pro level—congrats! Now it’s time to play smart with your finances. A solid tax strategy isn’t just a nice-to-have; it’s crucial for your long-term success. Our team likes to do a formal Q4 tax planning engagement with our monthly clients so we have a game plan together before December 31^st avoiding taxes where we can.

Optimize Your Earnings with Strategic Investments
If you cash flow allows for, and you are a qualify for registered investor status, you can take advantage of things like oil & gas leases and wildlife funds that provide large tax deductions to help you offset your taxable income.

Understand State Tax Implications
Earning business income in multiple states with events? Each state wants there piece of your state income. A CPA can help you navigate the maze of state tax laws to ensure you’re not paying more than you owe.

Retirement Planning—Start Now
It’s never too early to think about retirement. Investing in a 401K or an IRA today can reduce your taxable income and set you up for a financially secure future. Plus, it’s a great way to ensure your earnings work for you long after you’ve left the field. And these monies are asset protected!

💡 Seeking Professional Advice?

Don’t leave your financial future to chance. A licensed CPA can provide the expert advice you need to manage your money wisely. From tax strategies to retirement planning, having a trusted advisor in your corner is a game-changer.

Whether you’re a rising college star or a seasoned pro, understanding your taxes is crucial to keeping your finances on track. At Insogna CPA, we’re here to help you navigate the complex world of athlete taxes. Don’t let taxes sideline your success—reach out to us today and let’s build a game plan for your financial future.

Contact our team today! We really do call you back and respond to your inquiries.

Last Minute Tax Filing Tips 2024

Haven’t filed your taxes yet? It’s okay, you’re not alone. Believe it or not, many people don’t file in early February when tax season starts. In fact, about one-third of taxpayers in the U.S. wait until the last two weeks before the April deadline to file!

But waiting too long can cause headaches. Rushing to meet the deadline increases the risk of errors, which could cost you more in the long run.

With the deadline looming, now is the perfect time to get organized—whether you file yourself or seek professional help. Ignoring your tax prep won’t make it disappear (unfortunately), and filing late will only add interest charges, which could end up costing you hundreds.

Start by Getting Your Tax Paperwork Organized

We get it—paperwork isn’t fun. Tax forms tend to mix with junk mail, old bills, and receipts from last year. But even if the thought makes you groan, organizing your tax documents is the first essential step for smooth tax filing. You’ll feel a weight lift once it’s done, trust us.

Here’s what you’ll likely need for tax filing:

📌 W-2 forms
📌 1099 forms
📌 Mortgage interest statements
📌 Receipts for deductions, like charitable donations or medical expenses
📌 Health Savings Account (HSA) statements

💡 Pro Tip Create a dedicated folder and collect your tax docs throughout the year. That way, when the next tax season rolls around, you’ll be ready—and you might even file early!

❓ Should You Take the Standard Deduction or Itemize?

Time is ticking, so it’s tempting to take the standard deduction just to get it over with. But before you rush, check if your expenses might exceed the standard deduction. Even though the Tax Cuts and Jobs Act doubled the standard deduction, itemizing could still save you money, especially for state taxes.

Need help figuring out if itemizing is the right move? We’re here to assist you, but don’t wait too long—accountants get busy fast as the deadline approaches.

❓What Happens If You Miss the April 18th Deadline?

If the April 18th filing deadline passes by and you still have not filed, there will definitely be repercussions from your decision, however, the severity depends on if you owe the government or not.

💡 Late-Payment Penalties

Even if you can’t pay your full tax bill, file on time to avoid the steeper “failure-to-file” penalty. It’s the smart, cheaper choice.

💡The Earlier You File, The Less You Pay

If you can’t pay the full amount, contact us ASAP to get your filing done. The sooner you file, the less you’ll end up paying in penalties. Remember, it’s not just about paying—it’s about filing first to minimize your financial hit.

💡Consider Filing for an Extension

If you’re still missing key documents, you can request a six-month extension by filing IRS Form 4868. But don’t forget: an extension only gives you more time to file, not more time to pay.

💡Pay What You Can Now

If covering the entire tax bill is out of reach, pay what you can when you file the extension. Then, work on settling the rest before the IRS comes knocking. If needed, you can set up a payment plan online.

Get Your Taxes Done Right

Feeling overwhelmed by tax filing? We’re here to help! Whether you need assistance with tax prep or an extension, contact us today. We’ll get your taxes squared away in no time, so you can stop stressing and avoid those costly penalties.

Ready to avoid those last-minute tax filing stress headaches? Get in touch with us today. Let’s get your taxes done right—and on time!

8 Smart Year-End Tax Planning Tips

Year-end is just around the corner, but you still have time to make some smart tax-saving moves before the clock runs out. These Power 8 strategies can help you lock in savings and set yourself up for a successful tax season.

1️⃣ Check Your Paycheck Withholding

Hey, check your paycheck withholding. Too much? Hello, refund! Too little? Hello, surprise bill from Uncle Sam! Aim for a break-even to make your money work harder, not the government.

2️⃣ Defer Your Income

Got a bonus coming? See if you can push it to next year and lower your tax bill. Self-employed and filing accrual basis? Consider delaying those invoices to your customers.

3️⃣ Adjust Retirement Account Contributions

Boost those pre-tax retirement contributions and save on taxes. Or look at maxing out your ROTH contributions by year-end. But remember, this money is for your golden years, so only boost if you have extra cash lying around.

4️⃣ RMDs for the 73+ Club

If you’re 73 or older, don’t forget to make your RMD withdraw from your retirement accounts by Dec 31st! Miss it, and Uncle Sam hits you with a hefty penalty. No one wants that.

5️⃣ Use Your Gift Tax Exclusion

Feeling generous? Use your $17,000 exclusion to give money to each person without Uncle Sam dipping into it. Stay under the radar of the IRS’s gift grab.

6️⃣ Maximize Tax Deductions and Credits

Pay property taxes and January’s mortgage early for deductions. Donating big? Itemize for tax breaks. Going electric? Enjoy those EV credits. And finish those eco-friendly home upgrades!

7️⃣ Consider a Roth Conversion

Switch to a Roth for tax-free growth and withdrawals. It’s a savvy move but chat with a pro first. Keep those dollars away from the taxman!

8️⃣ Consult a Tax Professional

End-of-year tax planning? Get a tax pro on your side, like us! Make smart moves, cut your tax bill, and stride into tax season like a boss.

Let’s turn these tax tips into real savings!

Call us today, and together, we’ll craft a personalized tax plan that ensures your 2024 year-end tax strategy is rock solid. Finish the year strong and stride into tax season with confidence!

6 Year-End Tax Planning Strategies to Consider Now

Have you kicked off your year-end tax planning yet?

As we are approaching the final quarter, it’s the perfect time for strategic tax planning to reduce your tax bill. If you’re a business owner, tax planning isn’t a one-and-done deal—it’s an ongoing process.

Tax Planning Tips

Here are six essential year-end tax planning strategies for 2024 that you should consider:

1️⃣ Review Your Business Structure
(see What’s the best business formation setup in this booklet). As your business grows, your structure (entity) may change.
2️⃣ Maximize Your Retirement Plan: Save on taxes by contributing to a retirement plan. Whether it’s a SERP IRA, Solo 401(k), or a combo of a 401(k) with a defined-benefit pension plan, these are effective tools for slashing your tax bill.
3️⃣ Utilize the Home Office Deduction: This valuable tax break can save hundreds, or even thousands, of dollars in taxes each year.
4️⃣ Ditch the Shoebox Accounting: Track income and expenses throughout the year using a cloud-based tool your accountant can access.
5️⃣ Consider First-Year Bonus Depreciation
80% bonus depreciationon new property acquired and placed in service during 2021. If you’re having a big income year, consider moving up big purchases before year-end (see Should I buy equipment for year-end in this booklet).
6️⃣ Be Proactive with Income and Deductions: If you expect to be in the same or lower tax bracket next year, deferring some income to 2025 could be beneficial. Conversely, if you expect a higher tax bracket, accelerating income into 2024 or delaying deductions until 2025 might make sense.

💡 More Tips

Don’t miss out on additional year-end tax planning strategies. Download our comprehensive 2024 Year-End Tax Planning Guide for business owners and ensure you’re making the most of every opportunity to reduce your tax liability.

Ready to put these strategies into action?

Schedule a consultation with us today, and let’s tailor a tax planning strategy that works for your unique business needs—because smart planning now means fewer headaches later.

Offer in Compromise FAQs

If you’re staring down a tax debt you can’t possibly pay, it’s time to consider an IRS Offer in Compromise (OIC). This option lets qualified individuals settle their tax debt for less than the full amount owed, offering a financial lifeline when times are tough.

Contrary to popular belief, Offers in Compromise aren’t a pipe dream. The IRS approves over 40% of these applications, with the average settlement exceeding $10,000. Not too shabby, right?

❓ How to Know if You Qualify

Generally, there are three factors that are considered by the IRS when somebody applies for an Offer in Compromise. Most commonly, the IRS must have a belief that you will not be able to pay your tax debt off at any point in the near future. This means that your financial situation is probably not going to improve anytime soon and that the IRS would not likely be successful in forcing collections on you.

At the end of the day, the IRS needs to believe they are getting a fair deal – so if you have any potential to pay your debt at any point in the near future, you may not qualify.

You might also qualify for an Offer in Compromise if there is doubt as to your actual tax liability; if you have documentation proving that you owe less in taxes than the IRS believes to be true, or if an assessor has made a mistake on your reporting, you may be more likely to have an Offer in Compromise accepted by the IRS.

Finally, if paying your tax bill would create a significant financial hardship, you may also qualify for an Offer in Compromise. Of course, proving financial hardship can sometimes be a challenge.

In addition to all of these considerations, there are several other eligibility requirements that you must meet in order to qualify for an Offer in Compromise:

✅ You must pay the application fee
✅ You must have filed all of your required tax returns
✅ You cannot be going through a bankruptcy at the time of filing
✅ You must submit all required documentation

❓ What to Expect from the Process

One of the most complicated aspects of going through the application process for an IRS Offer in Compromise is filling out and submitting all the required paperwork. There are several documents you may need to complete to even be considered for an Offer in Compromise, including:

💡 IRS Form 433-A – this form requires information on your assets, liabilities, expenses, and income to determine your Reasonable Collection Potential.
💡 IRS Form 433-B – this form needs to be filled out for businesses applying for an Offer in Compromise.
💡 IRS Form 656 – use this form to apply for an Offer in Compromise so long as there are no doubts as to your tax liability.
💡 IRS Form 656-L – use this form to apply if you are disputing your tax liability to the IRS.

In addition to completing these official forms as part of the application process, you will also need to provide some documentation, such as:

📌 health care statements
📌 bank and credit card statements
📌 investment information
📌 proof of living expenses
📌 car loan, mortgage, and similar loan statements
📌 copies of related tax returns
📌 Working With a Tax Professional Can Help

As you can probably see, the process of determining your eligibility and applying for an Offer in Compromise with the IRS can be quite time consuming and complex. This is where it can be helpful to consult with a tax professional for assistance. A qualified and experienced tax professional will be able to assess your current tax situation and give you a better idea as to whether or not going through the Offer in Compromise application process is worth your time and efforts.

If so, he or she will also be able to assist you with the application process, ensuring that you’re filling out the correct forms and that you submit all required documentation as well. This can increase your chances of reaching a successful offer with the IRS and take a lot of the stress and burden off your chest.

Even if you don’t qualify for an Offer in Compromise, your tax professional may be able to assist you in figuring out other alternatives for making your tax payment more financially manageable for you. This might include options to work out a payment/installment program with the IRS, among other options.

💡 The Bottom Line

Getting an IRS Offer in Compromise accepted is almost a coin flip, but if you meet the qualifications and submit everything correctly, your chances are solid. To boost your odds and lighten your load, team up with a seasoned tax professional. Don’t have one? Now’s the time to find one who can help you navigate the 2024 tax landscape and get the relief you need.

Ready to explore your options?

Reach out to us today to schedule a consultation and take the first step toward a fresh financial start. Whether it’s an Offer in Compromise or another solution, we’re here to guide you every step of the way.

How Inflation Can Impact Your Taxes in 2024

Guess what? Inflation isn’t just about rising prices—it’s also giving your federal tax breaks a bit of a boost. In fact, for the 2023 tax year, we’re looking at a solid 7% increase in many federal tax adjustments compared to 2022. And hold onto your hats, because we’re diving into what this means for your wallet, including some early estimates for 2024. By the end of this, you’ll be walking around like a tax-saving pro, ready to take on the year until the official numbers drop in October.

📌 Annual Federal Gift Tax Exclusion

The 2024 tax year is bringing some gift-giving goodness your way. Brace yourselves for a significant increase in the annual federal gift tax exclusion, soaring to a dazzling $17,000 per lucky taxpayer. That’s right, we’re talking about a large $1,000 hike from last year’s limit of $16,000. And here’s the best part: annual gifting up to this exclusion amount won’t work its way into your lifetime federal gift and estate tax exemption. The exclusion amount only goes up in $1,000 increments, so if the inflation factor stays put at 4% for 2024, get ready to see the same $17,000 exclusion next year. Excited about gift-giving yet?

📌 Unified Federal Gift and Estate Tax Exemption

In life, there are death and taxes. Fortunately, if you are the beneficiary of an estate, the 2023 tax year is delivering some serious tax benefits. The federal gift and estate tax exemption has skyrocketed to $12.92 million. That’s an eye-popping increase of $860,000 from last year’s $12.06 million. But wait, there’s more! If you filed your taxes as married, you get the privilege of doubling your exemption to a staggering $25.84 million in 2023. That’s a mind-blowing $1.72 million jump from 2022!

Now, let’s talk about the good news for all the high-net-worth individuals out there. These adjustments mean it’s time to break out the confetti because you can now make some seriously substantial gifts or leave behind some downright impressive estates, all without worrying about those pesky federal gift or estate taxes.

Did you know? The federal gift and estate tax exemption now goes up in flat increments of \$10,000. If inflation keeps steady at 4% for 2024, get ready to witness the exemption soaring to a potential $13.44 million in 2024 (or up to $26.88 million for all the lucky married couples out there).

📌Generation-Skipping Transfer Tax

The federal generation-skipping transfer tax (GSTT) also applies to wealth transfers targeting individuals more than one generation below the donor. Here’s the kicker: the exclusion for those generation-skipping gifts has soared to $17,000 for 2023. That’s a thrilling $1,000 increase from 2022. But wait, there’s more! The GSTT exemption for lifetime gifts and bequests aligns with the unified exemption, reaching an impressive $12.92 million ($25.84 million for all those lucky married couples) in 2023. Now, that’s what I call leveling up!

📌Noncitizen Spouses

Hey there, international lovebirds! Noncitizen spouses may miss out on the unlimited marital deduction privilege, but hold onto their passports because in 2023, the annual federal gift tax exclusion for noncitizen spouses skyrockets to a whopping $175,000. That’s a nice bump from last year’s $164,000. And it gets better: U.S. citizens can shower their noncitizen spouse with gifts up to $175,000 without touching a single penny of their own $12.92 million unified federal gift and estate tax exemption. Talk about international gift-giving bliss!

And with the inflation factor staying at 4% for 2024, the gift tax exclusion for noncitizen spouses could reach an estimated \$182,000. So, get ready to spread the love and share those tax advantages with your global sweetheart. It’s time to celebrate the power of love and a little thing

💡Lessons Learned

The significant inflation adjustments to federal gift and estate tax parameters are like golden opportunities knocking at your door. But hey, don’t go it alone on this tax adventure. To truly unleash the full potential of these favorable tax rules, I’ve got two words for you: consult and conquer!

Whether it’s your estate planning team or our tax experts, seek the guidance of the pros who know the tax game inside out. Trust me, you don’t want to miss out on maximizing your wealth transfer opportunities in this exciting tax landscape. So, stay informed, take proactive measures, and let’s show those taxes who’s boss! Together, we’ll conquer the world of tax breaks, one dollar at a time.

Ready to make the most of these federal tax changes in 2024?

Reach out to our expert team today. Let’s tailor a plan that fits your financial goals—because when it comes to taxes, every dollar counts. Let’s keep more of your hard-earned wealth where it belongs: with you.