January 10, 2025
Tax Updates for 2024: What You Need to Know
As we enter the 2025 tax season, whether you’re a business owner, investor, or managing your household budget, understanding the latest tax changes is key to keeping more of what you earn. Let’s break down the most important updates and how they could impact you.
Inflation Adjustments Mean Bigger Deductions
Good news: The IRS has adjusted tax brackets and standard deductions to account for inflation. This means you may owe less or even see a bigger refund.
• Married couples filing jointly: $29,200
• Single filers: $14,600
These increases can reduce your taxable income significantly. For example, if you’re a single filer earning $50,000, the higher standard deduction could lower your taxable income to $35,400, saving you hundreds in taxes.
👉 Tip: Review your W-2s and update your withholding if necessary. Minor adjustments now can prevent surprises later.
Learn more about the IRS inflation adjustments
Higher Gift Tax Exclusion for 2024
Feeling generous? The annual gift tax exclusion has increased by $1,000, allowing you to gift up to $18,000 per recipient without filing a gift tax return. This is not just an opportunity to share wealth with family or friends but also a chance to make smart financial decisions within tax-free limits.
Energy-Efficient Home Improvements Can Pay Off
Are you thinking of going green? Thanks to the Inflation Reduction Act, the tax credits for energy-efficient home upgrades have expanded. Homeowners can claim credits for improvements like solar panels, energy-efficient windows, or heat pumps installed in 2024. This isn’t just good for the environment—it’s a smart financial move that can pay off in the long run.
Find out which upgrades qualify
Retirement Contribution Limits Increased
Planning for the future just got more rewarding. Contribution limits for 2024 have gone up:
• 401(k): $23,000 (+ $7,500 for those 50+)
• IRA: $7,000 (+ $1,000 for those 50+)
This is your chance to reduce taxable income while building long-term savings. And don’t forget—you have until April 15, 2025, to make IRA contributions for the 2024 tax year.
IRS 401(k) and IRA limits explained
Cryptocurrency Reporting Changes
Crypto enthusiasts take note: The IRS now requires platforms to issue Form 1099-DA for certain digital asset transactions. Keeping detailed records of your crypto activities is essential to avoid penalties and ensure compliance.
Learn more about crypto reporting requirements
Health Savings Account (HSA) Contributions Are Up
HSA contribution limits have risen for 2024, giving you more room to save on a tax-advantaged basis.
• Individual coverage: $4,150
• Family coverage: $8,300
Maximizing these accounts can lower your taxable income while preparing for medical expenses.
Details on HSA contribution limits
Plan for a Smoother Tax Season
Tax laws change yearly, but with some preparation, you can take advantage of new opportunities to save and feel more in control of your financial future. Whether adjusting your withholding, planning home improvements, or maximizing retirement savings, now is the time to act.
Contact us today to get started navigating these updates and creating a tax strategy tailored to your needs!