Important Tax Changes for 2024 – Stay Informed!

posted on November 18, 2024

As we approach the new year, it's crucial to stay informed about the upcoming tax changes for 2024. These changes can significantly impact your financial planning and tax obligations. Here are some key updates you should be aware of:

1. Standard Deduction Increases

• Married Couples Filing Jointly: $29,200 (up $1,500 from 2023)
• Single Taxpayers and Married Individuals Filing Separately: $14,600 (up $750 from 2023)
• Head of Household: $21,900 (up $1,100 from 2023)

2. Retirement Plan Changes

The SECURE 2.0 Act of 2022 introduces several changes, including:

• Penalty-free early withdrawals from IRAs and 401(k)s for specific emergencies.
• Rollover of leftover 529 education account funds to a Roth IRA (up to $35,000 lifetime cap).
• No required minimum distributions for Roth 401(k) owners.

3. Earned Income Tax Credit (EITC)

The maximum EITC amount for 2024 is $7,830 for taxpayers with three or more qualifying children, an increase from $7,430 in 2023.

4. Alternative Minimum Tax (AMT)

The AMT exemption amount for 2024 is $85,700, up from $81,300 in 2023.

5. Corporate Tax Rate

Proposed changes include lowering the corporate tax rate to 15% for companies manufacturing products in the U.S.

6. Social Security Taxation

There are discussions about eliminating taxes on Social Security benefits, but this change is not yet confirmed.

7. Tax Inflation Adjustments

Various tax brackets and rates have been adjusted for inflation, affecting your taxable income and potential tax liability.

8. Digital Asset Transactions

New reporting requirements for digital asset transactions will be in effect, so ensure you keep accurate records.

9. Charitable Contributions

The qualified charitable distribution cap is indexed for inflation, allowing IRA owners aged 70½ and older to transfer up to $105,000 directly to charity without paying tax on the withdrawal.

10. Tax Withholding Estimator

Use the IRS Tax Withholding Estimator to determine if you need to make additional tax payments to avoid an unexpected tax bill.

We recommend consulting with a tax professional to understand how these changes may affect your specific situation. If you have any questions or need further assistance, please don't hesitate to reach out.

Best regards,

Bruce Stone, Director

Brew’s Incorporated