What’s new with your taxes this year?
For the past month, postal carriers have delivered a steady stream of greeting cards, advertisements and Amazon packages. Now that the flow of holiday mail has subsided, Americans are checking the mailbox for a different type of seasonal correspondence: tax forms.
Tax season is nigh. As you begin packing up your holiday decorations and gathering your tax documents, it wouldn’t hurt to brush up on the latest changes to tax provisions and inflation adjustments.
The official list of IRS changes is … long. Its rundown of those changes is a much more manageable read by comparison. But here’s a look at some of the most important changes that are likely to affect our members:
You could be in a new tax bracket
While there are no changes to the tax brackets and tax rates for 2024, the IRS is making adjustments to many of the income thresholds. The changes mean if you received a raise or a cost-of-living increase in 2023, you may avoid getting pushed into a higher tax bracket.
Whew.
To itemize or not to itemize?
The standard deductions for 2024 are increasing this year, so if you were on the fence about itemizing before, you may find yourself back on the fence this year. Married couples filing jointly will see an increase of $1,500 from last year. Individual filers will see an increase of $750. Heads of households will have an $1,100 increase.
More for your health
If you contribute to a health flexible spending account (FSA), starting in 2024 you can contribute up to $3,200. And, depending on your plan, you may be able to carry up to $640 into the next year.
Earned income tax credit increases
The earned income tax credit is a tax break for low to moderate-income workers. And in 2024, it will receive a bump. Your eligibility and the amount you receive depends on your income and the number of children you have, but in 2024 the maximum amount available will be $7,830.
Adoption deductions increase
Growing your family through adoption? The maximum credit allowed for adoption expenses has increased to $16,810 in 2024.
Gift tax exclusions increase
The annual exclusion for gifts is increasing to $18,000 for calendar year 2024, up from $17,000.
Estate tax exclusions increase
The estate tax is a tax on your right to transfer property upon your death. The exclusion establishes a threshold for that taxation. In 2024, estates valued at or below $13.6 million will not be subject to estate tax. That’s up from $12.92 million in 2023.
These are just a few of the things that have changed since the last time you filed a tax return. We’ve certainly seen larger, more sweeping changes in the past, but there’s still plenty to keep in mind as you start filing.
If it seems like a lot to keep track of, don’t worry. If you’re an OCCU member and you’re doing your own taxes this year, you can save up to 20% on TurboTax software. Want some in-person help this year? New H&R Block clients can save up to $25 on in-office tax preparation services. With the right tools, including an OCCU membership, you can maximize your tax refund this year while taking full advantage of the new changes in tax law.
*Note: The above information is not intended as tax advice. Please consult your tax professional for tax information.
