tax changes

As the clock ticks towards a new tax filing year, staying in the know about the latest tax changes is not just smart—it’s essential. With 2024 on the horizon, rules have evolved, deadlines loom closer, and potential benefits await keen taxpayers who know how to navigate their taxes. 

Whether you’re an individual filer or run a business, understanding shifts in tax laws can significantly impact your return. Let’s unpack what’s new so you can file with confidence.

Deadlines for Filing Returns and Extensions 

For personal tax returns, tax filing day in 2024 falls on Monday, April 15th. If you live in Maine or Massachusetts, you have until April 17th to file because April 15th and 16th are state holidays.

Self-employed individuals will have to pay quarterly taxes. These dates fall on April 30th, July 31st, October 31st, and January 31st unless these dates fall on a holiday. 

If you apply for an extension, the deadline is October 15th. 

Date You Can Expect to Receive a Refund 

The date you can expect your refund will be up to a few factors:

  • When You Filed Your Taxes: Refunds are issued within 21 calendar days if you filed a digital return. For paper returns, expect it to take up to four weeks.
  • How Much Your Employer Took Off Your Paycheck: All states expect your employer to take a percentage of your income for taxes. However, New York payroll tax rates and California payroll tax rates vary. If your employer took off the required amount, then you should receive a refund after you do your taxes. If not, you may owe money. 
  • Whether You’re Entitled to a Refund: Self-employed individuals have to save a portion of their income for taxes and send that money to the IRS before their deadline. They often owe money, but if they overpay their taxes, then they may receive a refund.

Income Tax Brackets 

One of the major tax changes in 2024 includes your potential tax bracket. The IRS adjusts tax brackets yearly to keep up with inflation. Due to the massive rise in inflation this year, your federal tax bracket will look much different. State tax brackets will also change significantly.

The US separates its income tax brackets into three categories: single filers, head-of-household filers, and married people filing jointly. For 2024, these tax brackets are as follows:

Tax RateSingle FilersHead-of-Household Married Filing Jointly
10%$11,600 or less$15,700 or less$22,000 or less
37%$578,126 or more$578,101 or more$693,751 or more

Standard Tax Deduction

The standard tax deduction is a flat adjustment to your adjusted gross income. In the 2019 tax year, 87.3% of Americans took this deduction. Americans who wouldn’t take a standard tax deduction will have eligible deductions that exceed the deduction amount for their filing status.

Filing Status20232024
Single Filers$13,850$14,600
Head-of-Household $20,800$21,900
Married Filing Jointly$27,700$29,200

* Seniors have an additional standard deduction

Self-employed individuals can’t take a standard tax deduction and must itemize their expenses. 

Itemized Deductions and Contribution Limits

Along with tax bracket change, you’ll also see the caps for itemized tax deductions rise. This means that your cap for how much you can claim on medical expenses, vehicle use, etc., is higher than it was last year. This may mean you’ll also get more back on your return.

Here are some important changes to itemized deductions in 2024:

  • State and Local Taxes: Taxpayers who itemize can deduct up to $10,000 in sales, income, and property taxes that they’ve already paid to state and local governments.
  • Medical Expenses: Individuals and self-employed contractors can only deduct medical and dental expenses that exceed 7.5% of their adjusted gross income. 
  • Mortgage Interest: In 2024, individuals and self-employed contractors can deduct interest paid on the first $750,000 of mortgage debt. If you bought your home before December 16th, 2017, you can deduct up to the first $1 million. 

Contribution limits for IRA, 401(k), and health savings accounts (HSAs) have changed.

Here are their new limits:

  • IRA: If you aren’t under an employer-sponsored plan, your limit is $6,500.
  • 401(k): You can contribute up to $23,000, up from $22,500 in 2023.
  • HSA: Individual coverage rose to $4,150, and family coverage rose to $8,300.

If you collect social security or child tax credit, you should be aware of the following:

  • Social Security Adjustment: You’ll receive a cost-of-living adjustment of 3.2%
  • Child Tax Credit Limits: The tax credit provides $2,000 per qualifying independent under the age of 17. The amount you receive for the child tax credit decreases if income exceeds $200,000 for single filers or $400,000 for married couples filing jointly. 

Taxes for Restarted Student Loan Payments 

After over three years, Congress ended its student loan payment clause in June 2023. While this means that students have to start paying their loans again in 2023, it also means that they get to deduct their student loan interest. Up to $2,500 can be deducted every year. 

You don’t have to itemize to claim this amount. Instead, you’ll take it as an income adjustment on your Schedule 1. With this adjustment, you’ll receive a dollar-for-dollar cut on your tax bill. 

Electric Vehicle Tax Credit

The electric vehicle tax credit was introduced in 2009 to encourage citizens to buy electric vehicles. Even though this credit has been around for a while, we’re including it here because more and more people are adopting these cars, and a few changes have been made. 

You can claim up to $7,500 for a new electric vehicle and $4,000 for a used model. However, your modified adjusted gross income (MAGI) must be below these thresholds for 2024:

Filing StatusThreshold
Single Filers$150,000 or lower
Head-of-Household $225,000 or lower
Married Filing Jointly$300,000 or lower

Keep in mind that not all vehicles qualify for the deduction, so do your research beforehand. 

In Conclusion… 

Now that you’re armed with key insights on the tax changes awaiting you in 2024, it’s time to leap into action. Don’t let these new rules and opportunities pass you by. Instead, use them to your advantage. Staying proactive and informed is your ticket to a stress-free tax season.