Four Ways CPAs Help You Save and Prosper

Reflecting on Gratitude as a CPA

It's that wonderful time of year when reflection and gratitude take center stage. As a CPA, I find myself thankful not only for the clients I work with but also for the remarkable tools and systems at my disposal. These tools not only help clients save money but also empower them to plan effectively and approach tax season with confidence. I'd like to share four key aspects of my work that I'm particularly grateful for this year.

1. The Gift of Standard Deductions

The standard deduction often feels like a gift to many taxpayers. For single filers, it's set at $15,750; for married couples filing jointly, it's $31,500; and for heads of household, it's $23,625. If a client's itemized deductions fall short of these amounts, the standard deduction is typically the easier and more beneficial choice. It's satisfying to simplify tax filing while ensuring that clients don't miss out on valuable tax savings. Picture a young couple deciding whether to itemize or take the standard deduction. By choosing the latter, they find themselves with extra savings to put towards a dream vacation.

2. Retirement Contributions: Planning for the Future

Helping clients maximize their retirement savings is one of the most rewarding parts of my job. Contributions to IRAs can go up to $7,000, or $8,000 if you're aged 50 or over. For 401(k) plans, the limits are even more generous, up to $23,500, with an increase to $31,000 for those 50 and up. Notably, between 2025 and 2028, catch-up contributions will rise further for those aged 60 to 63—such insights can significantly impact retirement planning strategies. A client balancing between Traditional and Roth contributions might find the right combination that optimizes their tax savings now and in retirement.

3. Leveraging Health Savings Accounts (HSAs)

HSAs offer a triple tax advantage and that's something to be thankful for! With the ability to contribute $4,300 for individual coverage or $8,550 for family plans, plus an additional $1,000 if you're over 55, HSAs aren't just saving tools—they're financially strategic vehicles. Imagine a client saving consistently over years, using these funds tax-free for medical expenses, which brings a real sense of financial peace.

4. The Child Tax Credit Advantage

Beyond savings, credits like the Child Tax Credit offer direct financial relief. With up to $2,200 per qualifying child (under 17), and a partially refundable amount of up to $1,700, families can ease some of the financial burdens. The phase-out thresholds, $200,000 for single filers and $400,000 for married couples filing jointly, ensure that this benefit reaches those who need it most. Assisting a hardworking family in understanding and applying these credits can mean more financial room for everyday living. As we embrace the closing months of the year, I encourage everyone to review these opportunities. There's no better time to reach out, ensure you're making the most of these chances, and possibly even secure professional guidance to maximize your benefits. After all, a bit of expert advice can make a world of difference in achieving financial success.