13 tax return filing tips for 2024
Child tax credit, clean vehicle credit updates
MINNEAPOLIS (March 14, 2024) — When it comes to filing your taxes, there are laws to abide by from the government, of course, but then there is also sound advice from certified public accountants to heed to make the process as smooth as possible.
First and foremost: Start with the obvious.
“It’s very important to get all your tax documents together and be very organized ahead of time,” said Lance Campbell, a partner with Hawkins Ash CPAs in Rochester. “Do not wait until the last minute to get your tax documents together and expect to get your return filed on time.”
For a deeper look at specific items that you should know, Steven E. Warren, CPA, MBT, a senior manager at Schechter Dokken Kanter CPAs in Minneapolis, shared these additional tax filing tips for 2024.
- The clean vehicle credit offers a generous tax break for qualifying purchasers. Used vehicles are first eligible for the credit on 2023 tax returns, with somewhat different qualifications/rules than apply for new vehicle purchases. If you purchased a clean vehicle in 2023, see Form 8936 instructions to determine whether you qualify for the credit.
- The maximum refundable child tax credit is $1,600 per child for 2023 tax returns at the time of this writing. A proposed tax law would retroactively increase the amount to $1,800 per child for 2023 tax returns. The IRS announced that if this proposal becomes law retroactively, they will make the change for already filed tax returns without need for an amended income tax return or other action by the taxpayer.
- Minnesota has a new refundable child tax credit allowing $1,750 per qualifying child. The credit is phased out based on your income, marital status and the number of children you have.
- Out-of-pocket charitable contributions and charitable mileage are deductible and often overlooked. This includes driving for a charity at 14 cents/mile.
- Deduct the balance of any unamortized points (a payment to buy down your interest rate) when you refinance your home mortgage. Interest on a home equity line of credit is only deductible when the loan proceeds are used to buy or improve the home.
- Consider any dividend and capital gain reinvestments when calculating the gain or loss on the sale of a security. Reinvestments become a part of your basis and reduce the taxable gain or increase the loss to give you a better tax result.
- Make sure you have the appropriate support for your deductions in the proper form and acquire it in a timely manner. For example, obtaining proper support for a charitable contribution prior to filing your tax return is normally required to deduct the donation.
- Include Minnesota tax rebates received in 2023 as “Other Income” on Schedule 1 of your federal income tax return. It is not taxable to Minnesota and is a subtraction on Minnesota Schedule M1M.
- Minnesota renters can now check to see if they are eligible for a property tax refund using Form M1. Homeowners still use Form M1PR to calculate any available property tax refund.
- Some people with lower income choose not to file because they don't owe anything. However, they may be missing out on a refundable earned income credit, working family credit, child tax credit, American opportunity credit, premium tax credit or property tax refund. Filing is also the only way to get a refund of income tax withholding that is not owed.
- While e-filing is generally encouraged, for paper filers:
- Sign and date the returns.
- Attach to the tax returns copies of W-2s, 1099-Rs, etc., that include income tax withholding.
- Copy the signed returns for your records.
- Use correct postage. Consider using certified mail if additional proof of mailing is desired.
- If you’re unable to complete your individual income tax return by the initial due date, file for a six-month extension to file by April 15, 2024, using Form 4868. Form 4868 also extends Minnesota individual income tax returns and the returns of most states, although some states require use of their own extension form. Any amount owed with the return to the IRS or Minnesota is due April 15, and this due date cannot be extended. Some states have a different tax return due date. Federal and Minnesota first quarter estimated taxes for those who pay are also due April 15. Some states have a different due date for estimates tax payments.
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