Here’s What’s new and some key items for taxpayers to consider before they file their 2024 taxes:

New Tax Changes for 2024

1. Standard Deduction Increases: The standard deduction for 2024 has increased to $14,600 for single filers, $29,200 for married couples filing jointly, and $21,900 for heads of households. This adjustment aims to account for inflation and could result in lower taxable income for many taxpayers.
2. Tax Bracket Adjustments: The IRS has updated the income tax brackets to reflect inflation. For example, the top tax rate of 37% now applies to individual incomes over $609,350 and married couples filing jointly with incomes over $731,200.
3. Earned Income Tax Credit (EITC) and Child Tax Credit: The maximum EITC amount has increased to $7,830 for taxpayers with three or more qualifying children. Additionally, the refundable portion of the Child Tax Credit has been updated.
4. Home Equity Loan Deductions: Interest paid on home equity loans or lines of credit (HELOC) is deductible if the funds are used to buy, build, or substantially improve the taxpayer’s main home.
5. 1099-K Reporting Threshold: The threshold for 1099-K reporting has been lowered to $5,000 for payments received via third-party networks like PayPal or Venmo.

Key Items to Consider Before Filing

1. Review Withholdings: Ensure that your withholdings are accurate to avoid owing taxes or receiving a large refund. Adjust your withholdings if you’ve had significant life changes, such as marriage, divorce, or a new job.
2. Maximize Deductions: Consider whether to itemize deductions or take the standard deduction. Keep track of expenses that may qualify for deductions, such as medical expenses, charitable contributions, and mortgage interest.
3. Retirement Contributions: Take advantage of increased contribution limits for retirement accounts, such as IRAs and 401(k)s.
4. Check for Credits: Don’t forget to claim any tax credits you may be eligible for, such as the EITC, Child Tax Credit, and education credits.
5. File Electronically and Choose Direct Deposit: Filing electronically and choosing direct deposit for refunds can expedite the processing of your return and reduce the chance of errors.

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