Accounting & Bookkeeping

What’s New for Taxes in 2024: Key IRS Updates You Should Know

August 21, 2023 Comments Off on What’s New for Taxes in 2024: Key IRS Updates You Should Know

Tax season is right around the corner, and the IRS has rolled out important changes for 2024. To help you stay on top of your tax game, here is a simple guide to what is new this year.

1. Higher Standard Deduction

  • What’s New: For 2024, the standard deduction has increased to $27,700 for married couples filing together and $13,850 for single filers. This means you can deduct more from your income before calculating your taxes.

2. Adjusted Tax Brackets

  • What’s Changed: The income ranges for tax brackets have been adjusted for inflation. This means the amount of income taxed at each rate has shifted, which could affect how much you owe.

3. Increased Retirement Savings Limits

  • What’s New: You can now contribute up to $23,000 to your 401(k) and $7,000 to your IRA in 2024. If you are fifty or older, you can also make extra catch-up contributions to boost your savings even more.

4. Updated Child Tax Credit

  • What’s Changed: The Child Tax Credit has new amounts and income limits for 2024. Check the latest details to see how these changes might benefit you.

5. Higher HSA Contribution Limits

  • What’s New: You can contribute up to $4,150 to an HSA if you are single, or $8,300 for a family. If you are fifty-five or older, you can add an extra $1,000 to these limits.

6. More Credits for Home Improvements

  • What’s Changed: There are new or expanded tax credits for making energy-efficient upgrades to your home. This could help you save money if you have made any recent improvements.

7. Business Deduction Updates

  • What’s New: There are new limits on certain business deductions, including those for home offices and depreciation. Make sure to review these updates to maximize your deductions.

8. New Reporting Rules for Digital Assets

  • What’s Changed: The IRS now requires more detailed reporting for digital assets like cryptocurrencies. Keep good records of any transactions and follow the new rules.

9. Changed Tax Filing Deadlines

  • What’s New: Some tax filing deadlines have been adjusted. Be sure to check any changes so you can file on time and avoid penalties.

10. Better IRS Services

  • What’s Changed: The IRS is rolling out improved customer service options, including better online tools. Use these resources if you need help with your taxes.

Wrap-Up

Understanding these IRS changes can make tax season easier and help you save money. If you are unsure about how these updates affect you, it is a good idea to talk to a tax professional.