Certified Public Accountant

The IRS has recently unveiled significant changes for the 2024 tax year, and it’s important for you to be in the know as these updates could impact various aspects of your financial landscape.

In terms of what’s new, the Hazardous Substance Superfund financing rate is making a return, and for crude oil and petroleum products, the tax rate now stands at $0.26 per barrel.

Now, let’s talk about adjustments in your pocketbook. Standard deductions have received a boost, offering some relief:

  • If you’re married filing jointly, your standard deduction is now $29,200.
  • For singles and those married but filing separately, it’s $14,600.
  • Heads of households get a standard deduction of $21,900.

On the tax rate front, the top rate remains at 37%, applicable to singles earning over $609,350.

Now for some other highlights that might be of interest to you: the $85,700 Alternative Minimum Tax (AMT) exemption has been set, with a $609,350 phase-out following. The maximum Earned Income Tax Credit (EITC) currently stands at $7,830 for parents who qualify and have three or more qualifying children.

The monthly cap for parking and transport has been raised to $315 if you utilize transportation benefits. Furthermore, a $3,200 wage reduction cap has been added to the Health Flexible Spending Arrangement (FSA).

For those with foreign earned income, the exclusion limit is now $126,500.

Let’s now discuss what doesn’t change for you. There is no cap on itemized deductions, and the personal exemption stays at zero. The Lifetime Learning Credit’s income ceiling remains unchanged as well.

Understanding these updates is crucial for managing your taxes effectively in the coming year. If you have questions or need personalized advice tailored to your unique situation, it might be wise to consult with tax professionals. Here’s to a financially savvy 2024!