Tax season is just around the corner, and while the IRS hasn’t officially announced when they’ll start processing returns, it’s typically the last week of January. Here’s what you need to know to get ready and make filing your taxes as smooth as possible.
Let’s talk tax brackets for 2024. If you’re filing as a single individual, the tax rates break down like this: 10% for taxable income up to $11,600, 12% for income over $11,600, and so on, with the highest rate of 37% for those earning over $609,350. Married couples filing jointly have a slightly different structure, starting with 10% for income up to $23,200 and topping out at 37% for income over $731,200. These rates determine how much tax you owe based on your income.
For families, the Child Tax Credit is staying the same this year. It’s worth up to $2,000 per qualifying child under 17 by the end of 2024. This credit can make a big difference when calculating what you owe or might get back.
If you’re a freelancer or gig worker, there’s an update about 1099-K forms. These are used to report income from payment apps like Venmo, Zelle, or PayPal. For 2024, anyone receiving over $5,000 for goods or services through these platforms will get a 1099-K form in January 2025. This won’t change the taxes you owe but will change how you report your earnings. In the future, the reporting threshold will drop to $600, so it’s good to stay informed.
Filing taxes doesn’t have to cost you a dime if you qualify for free options. Most people can use IRS Free File, which offers brand-name tax software for free electronic filing. Even if you don’t qualify, the IRS provides Free File Fillable Forms for everyone. The Free File system will reopen later this month, so keep an eye out for updates.
Wondering when you’ll see your tax refund? Most people get their refunds within 21 days, especially if they file electronically and choose direct deposit. The IRS also has a handy online tool, “Where’s My Refund?” to track your money. Just remember not to plan major purchases or pay bills based solely on when you expect your refund—it’s better to be safe than sorry.
Mark your calendars: the last day to file your 2024 taxes is Tuesday, April 15, 2025. However, if you’ve been affected by natural disasters, like Hurricane Helene in parts of Virginia, you might get extra time to file—until May 1, 2025, in this case.
Looking ahead to 2025, the IRS is adjusting tax brackets slightly, about a 2.75% increase. For singles, the 10% bracket will apply to income up to $11,925, while joint filers will see it cover income up to $23,850. The top 37% rate kicks in at $626,350 for singles and $501,050 for joint filers. These changes ensure brackets keep pace with inflation.
Filing taxes can be a hassle, but understanding these updates can make it a bit easier. Stay organized, use the tools available, and don’t hesitate to reach out for help if you need it. Here’s to a stress-free tax season!
