Tax Filing Guide for 2024: Changes You Need to Know

Tax season 2024 is just around the corner, and if you haven't started preparing yet, now is the time! Changes to tax laws this year may impact your filing, and staying informed can help you take advantage of deductions, credits, and planning opportunities.

Here are eight things to keep in mind as you prepare to file your 2024 taxes.

1. Income Tax Brackets Have Shifted Slightly

The IRS has updated the tax brackets for 2024 to adjust for inflation. Here’s a look at the updated ranges for each tax rate:

Taxable income brackets

2. The standard deduction increased slightly

For 2024, the IRS has increased the standard deduction to the following:

• Single filers: $14,600 (up from $14,450 in 2023)
  

• Married filing jointly: $29,200 (up from $28,700)
  

• Head of Household: $21,900 (up from $21,300)

Why it matters: A higher standard deduction means less of your income will be taxable, potentially lowering your overall tax bill. Most people will find it easier and more beneficial to claim the standard deduction rather than itemizing.

3. Itemized Deductions Stay Largely the Same

While many will still benefit from the standard deduction, some may opt to itemize. Key deductions for 2024 include:

• SALT (State and Local Taxes): Deduction capped at $10,000.
  

• Mortgage Interest: Deductible up to $750,000 in mortgage debt (pre-2018 loans may be deductible up to $1,000,000).
  

• Medical Expenses: Only those that exceed 7.5% of your AGI can be deducted.
  

• Charitable Donations: Up to 60% of AGI for cash donations, 30% for non-cash assets.

Why it matters: If you have significant mortgage interest, charitable donations, or medical expenses, itemizing may allow you to deduct more than the standard deduction. Be sure to track your expenses to determine which option is best for you.

4. IRA and 401(k) Contribution Limits Are Higher

For 2024, the contribution limits for retirement accounts have increased:

• Traditional IRA and Roth IRA: $7,000 (up from $6,500 in 2023) with an additional $1,000 catch-up contribution for those aged 50 and older.

• 401(k): $23,000 (up from $22,500), with a $7,500 catch-up contribution for those 50 and older.

Why it matters: Contributing to your IRA or 401(k) can reduce your taxable income and help you save for retirement. Maxing out your contributions will not only set you up for a better financial future but also help reduce your tax burden for 2024.

5. Health Savings Account Contribution Limits Are Up

If you’re enrolled in a high-deductible health plan (HDHP), 2024 brings higher contribution limits for your Health Savings Account (HSA):

• Individual: $4,150 (up from $3,850 in 2023)

• Family: $8,300 (up from $7,750)

• Catch-up contribution (for those 55+): $1,000

Why it matters: HSAs are a tax-advantaged way to save for medical expenses. By contributing the maximum allowed, you can reduce your taxable income for 2024 and enjoy tax-free withdrawals when you use the funds for qualifying medical expenses.

6. The Child Tax Credit Could Give You a Tax Break

The Child Tax Credit remains $2,000 per child in 2024 for children under 17. Here's the important phase-out information:

• Single filers: Phase-out starts at $200,000

• Married filing jointly: Phase-out starts at $400,000

Additionally, there is a $500 credit for other qualified dependents.

Why it matters: The Child Tax Credit directly reduces your tax bill, meaning you owe less in taxes if you qualify. This is one of the most valuable credits for parents, so don’t forget to claim it if you qualify.

7.The Alternative Minimum Tax (AMT) Exemption Is Higher

For 2024, the AMT exemption has increased to:

• Single filers: $85,700

• Married filing jointly: $133,300

The phase-out begins at $609,350 for single filers and $1,218,700 for married couples.

Why it matters: If your income is above these thresholds, you could be subject to AMT, which ensures you pay a minimum amount of tax. The higher exemptions for 2024 may help you avoid paying AMT, depending on your income level.

8.Estate and Gift Tax Exemption Is Higher

The 2024 estate and gift tax exemption has increased to $13,610,000, with the annual gift exclusion rising to $18,000 per recipient. This allows more room to pass on assets without triggering taxes, but the exemption expires at the end of 2025 unless Congress acts. These updates can impact your filing process and savings, so staying informed is crucial.

In conclusion, the 2024 tax changes offer valuable opportunities to reduce your tax liability and plan for the future. Take advantage of higher contribution limits and the increased standard deduction. Just be mindful that some benefits, like the estate tax exemption, may expire soon. Plan ahead to make the most of these updates.

Now, to ensure you don't miss any critical filing deadlines, let’s take a look at the important tax dates for the 2024 tax year:

Important Tax Dates for 2024:

• January 1, 2024 – The start of the 2024 tax year. This is when your tax-related financial activity for the year officially begins.

• January 31, 2025 – Deadline to receive your W-2 from your employer for the 2024 tax year. You’ll need this form to file your taxes.

• April 15, 2025 – Tax Day – The last day to file your individual 2024 tax returns (unless you file for an extension). If you owe taxes, this is the final day to make your payment.

• October 15, 2025 – Deadline for extended tax returns for those who filed for a tax extension. If you filed for an extension, this is the last day to submit your return.

• Quarterly Estimated Tax Deadlines: For those who are self-employed or have other sources of income that are not subject to withholding:

  • April 15, 2025 – Q1 estimated payment

  • June 15, 2025 – Q2 estimated payment

  • September 15, 2025 – Q3 estimated payment

  • January 15, 2026 – Q4 estimated payment (for the 2025 tax year)