Get Ready for Tax Season 2024!
It’s that time of year again! Tax season is just around the corner, and it’s important to stay updated on the changes made since last year. From covering who can file for free, what tax breaks are being offered, and what unemployment benefits are being taxed to what exactly has changed from last year, we’ll help make filing your taxes in 2024 a breeze!
Common Tax Mistakes to Avoid
Before we get started, let’s first cover some common tax mistakes. Try to avoid the following:
- Errors in filing status
- Miscalculating deductions
- Not reporting all income
To avoid making these mistakes, make sure to double-check your return, seek professional advice if needed, and try to file sooner than later in case you run into any issues.
Gather and Organize Your Documents
Getting your ducks in a row will help you out quite a bit when it comes time to file your taxes! So, before you dive into the tax preparation process, start by gathering all necessary documents. This includes W-2 or 1099 forms, receipts for deductible expenses, and any other relevant financial records. Organizing your documents early on can help streamline the filing process and help prevent errors.
When Are Taxes Due 2024?
Before jumping into the changes, it’s essential to understand when exactly you need to file your taxes and when they’re due. Taxes are due on Monday, April 15th, 2024. The IRS recommends that you file your taxes as soon as possible to minimize the risk of identity theft and ensure you receive any refund owed to you in a timely manner.
Missing the tax filing deadline could result in penalties and interest charges. So, mark the due date on your calendar and set reminders as the deadline approaches. If you need additional time, consider filing for an extension, but be aware that this doesn’t grant an extension for paying any taxes owed.
How Do I File My Taxes?
You have a few options for filing your taxes this year. You can choose to file them yourself online, use a tax preparation service or software package, or hire an accountant or tax advisor.
The best option for you will depend on how complex your taxes are, whether or not you’re comfortable filing them yourself, and whether or not you need help navigating the process. For example, if you own your own business, have investments or own rental property, then you may need the help of an accountant or tax advisor.
Who Can File for Free?
Good news – there are several companies that may offer free tax filing options. This includes many major players, such as TurboTax© and H&R Block©.* In addition, many states are offering their own free filing programs. So, no matter where you live, chances are there’s a free option available.
Some providers also offer free state return preparation. Taxpayers can go to the IRS Free File webpage to find the right IRS Free File offer for them.*
Tax Deductions and Credits
Tax deductions and credits can reduce your taxable income or the amount of tax you owe. Common examples include mortgage interest, student loan interest, and child tax credits. Make sure to research eligible deductions and credits based on your situation.
According to the IRS, the standard deductions for 2024 have changed and have been adjusted for inflation. The new deductions look like the following:*
- Single – $14,600
- Married Filing Jointly – $29,200
- Married Filing Separately – $14,600
- Head Of Household – $21,900
Some of the deductions you can choose to claim on your 2023 tax returns may include the following:
- Charitable Deductions: You can claim up to 60% of your adjusted gross income in charitable donations.
- Medical Deductions: You can claim up to 7.5% of your adjusted gross income when it comes to medical expenses.
- Business Deductions: If you work for yourself, you can claim travel expenses, home office deductions, and even your internet bill. However, you won’t be able to claim a home office deduction if you work remotely.
- Child Tax Credit: You can receive a credit of up to $2,000 per dependent child under the age of 17.
- AOTC (American Opportunity Tax Credit): This is a partially refundable credit that allows you to claim $2,500 per student.
What Has Changed Since Last Year?
Here are some of the changes according to the IRS.gov website:
- Tax brackets widened by roughly 7%, though the rates didn’t change.
- Due to inflation, the standard deductions increased.
- A 2023 reporting change has been delayed for business payments made through apps like Paypal and Venmo.
- There are many energy tax credits available, such as the Clean Vehicle Tax Credit.*
Visit Credits and Deductions for more details.*
Are Unemployment Benefits Being Taxed?
Yes, unemployment benefits are considered taxable income and must be reported on your federal tax return. Similar to the income you would make at a job, you’ll pay taxes on any unemployment benefits you receive. However, depending on your state, you may only need to pay federal taxes on your unemployment benefits instead of having to pay state taxes.
How to Check My Tax Refund Status
You can check your tax refund status through the official website of the tax agency in your country (e.g., https://www.irs.gov/ in the United States).* Use the “Where’s My Refund?” tool and enter the required information to get updates on your refund.*
Income Tax Brackets
Income tax brackets determine the percentage of your income that you owe in taxes. The rates vary based on income levels, outlined below:
- 37% for incomes over $609,350 ($731,200 for married couples filing jointly)
- 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
- 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
- 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
- 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
- 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
Conclusion for Tax Season 2024
Filing your taxes doesn’t have to be a daunting task with the right preparation. Stay informed about changes in tax laws, gather your documents, explore deductions and credits, and consider using technology or professional assistance for a smoother process. By being proactive and informed, you can navigate tax season 2024 with confidence.
Now that you know what’s changed since last year’s tax season and what breaks are being offered, you can take a deep breath! Sit back, relax, and wait for your tax return to hit your bank account. In the meantime, check out our blog post for 12 Smart Ways to Spend Your Tax Refund in 2024.
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