Tax season has officially arrived! As of January 27, the IRS is accepting 2024 tax returns, with the deadline for filing set for April 15. Whether you're filing for the first time or are a seasoned pro, it's essential to be aware of any key changes. While most tax filers may see little difference from last year, those who experienced a major life event—like marriage, having a child, or purchasing a home—could face some new twists.
Here are four crucial updates to keep in mind before filing your taxes:
1. More Free Filing Options Available
The IRS has expanded its Direct File program to more states, offering taxpayers with simple taxes, a free way to file their taxes directly with the agency. Now available in 15 states, the program allows taxpayers with simple tax situations to file at no cost. This year, filers claiming certain credits—like the Child and Dependent Care Credit and Premium Tax Credit—are also eligible to use the service. If your taxes are as bit more complicated or you have a business, contacting a local trusted accountant would be the way to go.
2. Updated Tax Brackets and Deductions
For 2024, the standard deduction has increased: single filers now get $14,600, and joint filers receive $29,200. High earners—individuals making over $609,350 and couples earning more than $731,200—will still face the top 37% tax rate. Make sure you know where you fall within the new tax brackets to avoid surprises when filing.
3. Tax Credits You Can Still Claim
There are still valuable credits available for eligible filers. For example, you can claim up to $7,500 for a new electric vehicle or up to $4,000 for a used one. The Child Tax Credit remains available for those with income limits—up to $400,000 for married couples and $200,000 for single filers. However, keep an eye out for potential changes, as some credits may be phased out in the coming years.
4. New Thresholds for Reporting Digital Payments
If you received over $5,000 for goods and services via platforms like Venmo or PayPal in 2024, expect a 1099-K form to report this income. Be aware that starting in 2025, the threshold for receiving a 1099-K will drop to $2,500, and by 2026, it will be just $600. So, if you sold items online, ensure you're keeping track of your transactions to avoid any surprises.
Tax season may seem complicated, but with these updates, you're better equipped to navigate the changes. Ready to file your 2024 taxes? Stay informed with us and make the most of your filing experience, here at Silvers Financial Services.
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