Tax Tips for March 2024

by | Mar 1, 2024 | Tax Tips

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A Strategy to Raise Your Medical Expense Deduction

With a little planning, you may be able to boost your itemized medical expense deduction when you file your 2024 tax return next year. Only eligible expenses exceeding 7.5% of your adjusted gross income are deductible. It’s not an easy hurdle to clear, short of a major medical disaster, which, of course, you want to avoid. But you can use a strategy called “bunching” medical expenses to exceed the 7.5% threshold.

Say, for example, that you’ve already scheduled surgery that will involve out-of-pocket expenses but you still fall short of the deductible threshold. Think about scheduling elective procedures, such as dental work or Lasik surgery, and making qualified purchases [Topic no. 502, Medical and dental expenses | Internal Revenue Service (] that will push you over the threshold for the year.

Remember, only the expenses over that amount and that aren’t covered by insurance or paid through a tax-advantaged account will be deductible. Contact the office for help running the numbers.

Handling Large Cash Transactions

A reminder for businesses: Within 15 days of a $10,000 transaction, you must use IRS Form 8300 to report the transactions. If you file electronically, forms are delivered to the Financial Crimes Enforcement Network. Paper forms are submitted to the IRS.

You also generally should provide written statements to parties whose names you’ve reported by January 31 of the year following the transactions. However, if a transaction you report is suspicious, don’t provide a statement to the individual involved.

Although you aren’t required to file Form 8300 for cash transactions of less than $10,000, the IRS encourages you to report suspicious transactions of any amount.

Erroneous Refund

Mistakes happen. What if you receive a refund from the IRS that you’re not entitled to? Or what if you receive one that’s more than you’re entitled to? How you must handle it depends on the details. A paper check refund should be voided and returned within 21 days of receipt to the address in the link below. But suppose you cashed the check. In that case, submit a personal check within 21 days to that address.

If the refund was by direct deposit, contact your bank to have them return the deposit. Also contact the IRS at the phone number in the link. Be aware that if the IRS intentionally changed your refund amount from what was on the return you filed, it will mail you a notice of explanation.

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