As we approach the 2024 tax season, it’s essential to stay ahead of the game and prepare for any changes that may impact how you file your taxes. Whether you’re a seasoned tax filer or a first-time filer, navigating the tax season can be overwhelming. That’s why we’ve put together this essential guide to help you prepare for the 2024 tax season and ensure you’re filing your 2023 tax returns accurately and efficiently.
Important Dates and Deadlines for Filing Taxes in 2024
The 2024 tax season officially kicks off on January 23, 2024. This is the first date the IRS will accept 2023 tax returns. The deadline for filing and paying your taxes is April 15, 2024.
If you are unable to file by the tax deadline date, you should request an extension by submitting IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. It’s important to note that although this gives you additional time to file your taxes, it does not give you more time to pay your taxes. If you are unable to pay in full by April 15, you’ll need to make payment arrangements with the IRS to avoid collection actions, such as wage garnishment or a tax lien.
Changes and Updates to Tax Laws
There are several changes and updates that may impact your 2023 tax return. One of the most significant is the increase in the standard deduction, which is adjusted annually for inflation. Single filers will get a $900 bump to $13,850. If you are married and filing jointly, your standard deduction will be $27,700 (up $1,800 from 2022 returns). Those filing as head of household will also get a generous increase of $1,400, making their 2023 standard deduction $20,800.
In addition to the increase in standard deduction, the following adjustments may also impact your taxes.
Child Tax Credit
For 2023 tax returns, the Child Tax Credit goes back to pre-COVID rules as it did in 2022. This means that the tax credit is no longer fully refundable (only refundable up to $1,600). The amount of the credit also goes to back to $2,000 per qualifying dependent. To claim the full credit, your modified adjusted gross income (MAGI) must be $200,000 or below ($400,000 or less if married filing jointly). If your MAGI exceeds these limits, the credit will be reduced by $50 for each $1,000 over the threshold.
Earned Income Tax Credit
For the 2023 tax year (taxes filed in 2024), the Earned Income Tax Credit (EITC) will be between $600 and $7,430, depending on your income, number of dependents, and tax filing status. If you don’t have any qualifying children but want to claim the EITC, you must be at least 25 years old but no older than 65.
| Number of Qualifying Children | Maximum Credit Amount | AGI Threshold for Single Filers or Head of Household | AGI Threshold for Married Filing Jointly |
| 0 | $600 | Up to $17,640 | Up to $24,210 |
| 1 | $3,995 | Up to $46,560 | Up to $53,120 |
| 2 | $6,604 | Up to $52,918 | Up to $59,478 |
| 3+ | $7,430 | Up to $56,838 | Up to $63,398 |
Annual Gift Tax
The 2023 annual gift tax exclusion amount is $17,000 ($34,000 if married), which is an increase of $1,000 over the 2022 amount. Any amount gifted above that total could be subject to taxes.
Adoption Tax Credit
The 2023 adoption credit is getting a $1,060 bump to $15,950. This is a non-refundable tax credit for those who adopted a child in 2023. There are income limits, so the credit may be reduced or eliminated. If your income is $239,230 or less, you’ll receive the full credit. For incomes between $239,231 and $279,229, the credit will be adjusted lower. Those with incomes of $279,230 or more are ineligible to take the adoption tax credit.
Health Savings Account (HSA)
The annual limit for contributions to your Health Savings Account (HAS) for 2023 taxes is $3,850 ($200 increase from 2022). If you have a family coverage, the contribution amount is $7,750. If you’re 55 or older, you may contribute an additional $1,000. HSAs offer a triple tax advantage: (1) contributions may be 100% tax deductible, (2) interest earned is tax-deferred unless used for non-medical expenses, and (3) withdrawals are also 100% tax-free when used for eligible medical expenses.
IRA & 410(k) Contributions
The annual deferral limits for 401(k) plans jumps to $22,500 for 2023 tax returns. This is a $2,000 increase over 2022. If you have a SIMPLE 401(k), the limit is $15,500 (up $1,500 from 2022).
Taxpayers who are age 50 or older can contribute an additional $7,500 (traditional and safe harbor 401(k) plans). This is up from $6,500 for 2022 tax returns. Those with SIMPLE 401(k) plans and age 50 or older may contribute an additional $3,500 (up $500 from 2022).
If you have a traditional or Roth IRA, the 2023 contribution limit is $6,500 ($7,500 if 50 or older). For Roth IRAs, your contribution amount may be reduced or eliminated based on your MAGI and filing status. Your traditional IRA contributions may be tax-deductible. Roth IRA contributions are not deductible.
Student Loan Interest Deduction
Now that student loan payments have resumed and interest is once again accruing, you may be able to deduct up to $2,500 on your 2023 tax return. To qualify for this above-the-line deduction, you’ll need to have a MAGI of less than $90,000 (single, qualifying widow(er) or head of household) or $180,000, if married filing jointly. You do not need to itemize to take this deduction.
Essential Documents and Information Needed for Filing Taxes in 2024
Now that you’re aware of some of the upcoming tax changes, it’s time to get ready to file your taxes. To ensure your tax return is filed accurately and efficiently, you’ll need to gather all essential documents and information. This may include:
- W-2 forms from your employer
- 1099 forms for any additional income, such as freelance or contract work
- Receipts for charitable donations
- Documentation for any deductions or credits you plan to claim
- Social Security numbers for yourself and any dependents
It’s important to keep these documents organized and easily accessible so you’ll be ready once tax season opens.
Step-by-Step Guide to Filing Taxes in 2024
Now that you’ve gathered all the necessary documents, be sure to follow our step-by-step tax filing guide below. This will help make the process smooth and error-free.
- Choose a tax preparation method, such as using tax preparation software or consulting with a tax professional. If you decide to file a paper tax return, just be aware that processing may take up to six months. We highly recommend e-filing whenever possible.
- Enter all relevant information into the tax preparation software. If you’re working with a tax professional, be sure they have everything they need to file an accurate return.
- Review your tax return for accuracy and completeness. Be sure to sign and date your return. If filing by mail, also attach all relevant tax documents, forms, and schedules.
- Submit your tax return by the deadline (April 15).
If you need help with your taxes, be sure to contact Tax Defense Network. We offer affordable tax preparation services for individuals and small business owners. We can also help find the right solution for your tax debt problems. For a free consultation and quote, call 855-476-6920 today!