Important Tax Dates:
Tax Deadline Day: April 15, 2024
Deadline to file for an extension: April 15, 2024
Extension filers Deadline Day: Oct. 15, 2024
Taxes are something that anyone rarely looks forward to and are frequently misunderstood. It’s an important to know how they impact your finances to be able to better manage them.
Key terms to understand for when you and your tax professional prepare your taxes:
Deductions – Something that can be removed from what you owe to help lower your tax bill. Common tax deductions include the standard deduction, the child/dependent tax credit and student loan repayment. Itemized expenses that can be included are charitable giving, state income tax, city property taxes and interest on your mortgage.
Taxable Income – The amount of money that you pay for your federal and applicable state taxes on. This is your income minus your deductions.
Federal Income Tax – The amount that you are required to pay to the federal government.
State Income Tax – The amount that you are required to pay to your state government. Alaska, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the nine states that currently do not require income taxes.
Pre-tax – The amount of money you earn before taxes are taken out. Pre-tax dollars are used for workplace plans and traditional IRAs. This allows you to contribute more now but will be subject to taxation when you retire.
After-tax – The amount of money you earn after your taxes are taken out. After-tax money is used for in-plan Roth options and Roth IRAs. Since you pay taxes on the money before it funds your retirement account, you don’t pay the taxes in retirement. To learn more about the differences between pre-tax and after tax contributions, click here to visit TIAA’s Understanding Contributions page.
To get more information about your retirement and taxes, visit TIAA’s website by clicking here or download their 2024 Tax Quick Reference Guide by clicking here.
