What's New For 2024

Federal, State and Local tax code is constantly changing. To keep our clients informed of the major changes that may affect your tax return this year, a list has been compiled below. 

Tax Deadline

For the 2024 tax season, taxpayers will have until Monday, April 15, 2024 to file their 2023 Federal tax return and pay any tax due.

CHILD TAX CREDIT

For 2023, the Child Tax Credit (CTC) is $2,000 per child under the age of 17 years old. The amount of CTC that can be claimed as the refundable Additional Child Tax Credit to $1,600 per qualifying child. As of January 17, 2024 there is currently a bill awaiting a vote in Congress that could increase the Additional Child Tax Credit.

Standard Deduction

The Tax Cuts and Jobs Act nearly doubled the Standard Deduction for all taxpayers. In 2023, the standard deduction increased to:

  • Single or Married Filing Separately $13,850

  • Married Filing Jointly or Qualifying Widow $27,700

  • Head of Household $20,800

Education Benefits

The American Opportunity Tax Credit to help taxpayers pay for the first four years of college. Income guidelines are expanded and required course materials (i.e. books) are added to the list of qualified expenses. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.

The Tuition and Fees deduction is not available for 2021 and later tax years. Instead, the income limitations for the Lifetime Learning credit were increased.

Vehicle Mileage

For 2023, the standard mileage rate for the cost of operating your car for business, medical reasons and moving have increased.

  • Business: 65.5 cents per mile

  • Medical or Moving: 22 cents per mile

  • Charitable: 14 cents per mile

Earned Income Credit

For 2022, the maximum amount of income you can earn and still receive the credit has increased: 

You may take the credit if:

  • You have three or more qualifying children and you earned less than $56,838 ($63,398 if married filing jointly).

  • You have two qualifying children and you earned less than $52,918 ($59,478 if married filing jointly).

  • You have one qualifying child and you earned less than $46,560 ($53,120 if married filing jointly).

  • You do not have a qualifying child and you earned less than $17,640 ($24,210 if married filing jointly).

For the 2023 tax year, the maximum credit is:

  • $7,430 with three or more qualifying children

  • $6,604 with two qualifying children

  • $3,995 with one qualifying child

  • $600 with no children.*

*For 2023, to qualify for the EIC credit without children you must be at least age 25 but under age 65 at the end of 2023.

Personal Exemption

The Tax Cuts and Job Act eliminated Personal Exemptions as a deduction on the Federal Tax Return.

401k Plan Limit

The limit on employee contributions to a 401(k) plan is $22,500 for 2023.  Individuals age 50 and over are eligible to make a catch-up contribution of $7,500 in 2023. For 2024, the contribution limit increased by $500 to $23,000.

The limit on contributions to a Traditional IRA is $6,500 ($7,500 for taxpayers 50 and older) for 2023. For 2024, the limit increased to $7,000 ($8,000 for taxpayers 50 and older).

Medical & Dental Expenses

For 2023, taxpayers can deduct only the part of their medical and dental expenses that are more than 7.5% of their adjusted gross income (AGI). 

Amounts paid for PPE, such as masks, hand sanitizer, and wipes for the primary purpose of preventing the spread of coronavirus are considered qualified medical expenses.

For business meal expenses incurred in 2021 and 2022, the CARES Act instituted a 100% tax deduction provided that the meals are provided by a restaurant. The deduction reverts back to 50% as of January 1, 2023.

BUSINESS MEAL EXPENSES

For a more comprehensive listing of Federal Tax Law and changes for 2023/2024, visit the IRS at www.irs.gov.