Tax Season 2024 Changes: Ahead of proposed changes to federal taxes in 2023, the Internal Revenue Service has urged taxpayers to take crucial actions now that will assist them in filing their 2023 federal income tax return the following year.
As the second in a sequence of notifications intended to assist taxpayers in preparing for the forthcoming tax season, the IRS has declared a multitude of novel modifications. Consider the following recommendations and updates before filing next year:
There will be an increase in both the standard deduction and federal income tax brackets in 2024. Due to inflation, which has maintained elevated prices throughout the year, this modification has been implemented. The increased amounts will be deducted from the taxes you file in 2025, not 2024.
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What modifications are being made to taxes in 2024?
Additional tax changes that take effect next year may result in a higher deduction amount from your payment.
In 2024, Social Security recipients will be eligible to receive a cost-of-living adjustment of 3.2%. Because January 1 is a holiday, the initial increase in your payment is anticipated to be deposited by the conclusion of December.
Additionally, the IRS declared several additional increases to well-liked tax credits and deductions for 2024. This includes adjustments to the gift tax exclusion, an increase in the foreign-earned income exclusion, and an increase in the maximum sum for the Earned Income Tax Credit.
Furthermore, since 2023, the standard tax deduction bracket for individual registrants has been increased by $750 to $14,600. The increased standard deduction for married individuals filing jointly is now $29,200, a $1,500 increase from the prior year.
The majority of taxpayers with straightforward tax returns claim the standard deduction to lower their taxable income.
If your only source of income is your employer and you are classified as a W-2 employee, maximizing your tax refund is typically achieved by utilizing the standard deduction. If you are self-employed or wish to claim specific deductions, you shall itemize said deductions.
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