HIGHLIGHTS OF 2024 TAX LAWS FOR INDIVIDUALS

Tax Brackets and Tax Rates

There are seven tax rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

The long-term capital gains rates are 0%, 15%, and 20%.

Standard Deduction

 Married filing jointly $29,200

Head of Household $21,900

Single $14,600

Married filing separately $14,600

Additional amount if over age 65, blind or disabled

$1,950 – Single or head of household

$1,550 – Each spouse meeting criterion for married filing jointly, qualified surviving spouse, and married filing separate

Personal Exemptions

The personal exemption is repealed.

Annual Exclusion for Gifts

For 2024, the first $18,000 of gifts to any person are not included in the total amount of taxable gifts under Code Section 2503. For 2025, the amount increases to $19,000.

Child Tax Credit

For 2024, the child tax credit (CTC) is $2,000 per qualifying child (under age 17) and has a refundable component or the additional child tax credit (ACTC) of up to $1,700, subject to MAGI limitations. To be eligible for the CTC, each qualifying child claimed on the tax return must have a Social Security number. The CTC is also available for MFS returns. In the case of divorced or separated parents, if the child is the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents, only the noncustodial parent can claim the CTC for that child. AGI phaseouts for the CTC begin with MAGI of more than $200,000 ($400,000 MFJ). Note that the age limit for a qualifying child is under the age of 17 at the end of the tax year.

Dependents not eligible for the CTC may be eligible for the other dependent credit (ODC) of $500. Dependents qualifying for the ODC include qualifying children age 17 and older, dependents without a SSN, or qualifying relatives.

Dependent Care Expenses

For 2024, the child and dependent care credit is a nonrefundable credit and the eligible expenses are $3,000 for one eligible dependent and $6,000 for two or more eligible dependents.

Energy Credits for the Home

ENERGY EFFICIENT HOME IMPROVEMENT CREDIT

For property placed in service in 2024, the credit is 30% of the sum of the amount paid or incurred by the taxpayer for qualified energy improvements installed during the year. There is an annual limit of $1,200 with certain property limitations. In addition, there are separate annual limits of $600 for credits for windows and skylights, and $250 for exterior doors ( with a total of $500 for all exterior doors). A $2,000 annual limit applies to amounts paid for specified heat pumps, heat pump water heaters, and biomass stoves and boilers. Energystar.gov is a good site to see if your purchase qualifies for the credit.

RESIDENTIAL CLEAN ENERGY CREDIT

The residential clean energy credit includes solar, fuel cell, wind, geothermal and qualified battery storage. The credit amount is 30% for property placed in service after December 31, 2021, and before January 1, 2033.

Energy Credits for Clean Vehicles

The credit for new clean vehicles can be as high as $7,500. A qualified vehicle must have final assembly in North America, meet critical mineral or battery component requirements, and have a minimuym battery capacity of seven kilowatt hours.

The seller must provide a report to the taxpayer and the IRS. Additionally, the credit requr4es the manufacture’s suggested retail price for vands, SUVs and pickup trucks cannot exceed %80,000 ($55,000 for any other vehicle).

Taxpayers must meet income guidelines to claim the credit on EV purchases. Households with a modified adjusted gross income of up to $300,000 (MFJ, QW) ,$225,000 (HOH) or $150,000 (all others) qualify for the credit.

Taxpayers can elect to transfer the credit to tyhe dealer to reduce the purchase price. However, if their MAGI exceeds the limit, they must repay it Schedule A (Form 8936) us ysed ti recibcuke tge credut. Make sure to request FGdorm 15400, Clean Vehicle Seller’s report fro the dealer.

Taxpayers who lease eligible EVs can’t claim the CVC.

There is also a credit for previously owned clean vehicles purchased after Dec. 31, 2022, and before Jan. 1, 2033.

The Department of Transportation has a tool on its website where you can enter the vehicle identification number of the EV you’re interested in buying to determine its eligibility for the credit (https:/afdc.energy.gov/laws/electric-vehicles-for-tax-credit). The IRS also has information on its website regarding the EV credits.

Identity Protection PIN

The IRS Identity Protection PIN (IP PIN) Opt-In Program has been expanded to all taxpayers who can properly verify their identity. An IP PIN helps prevent your social security number from being used to file a fraudulent federal income tax return. You can use the Get An IP PIN tool on www.irs.gov to request an IP PIN.

IRS Online Account

An Online account is an online system that allows you to securely access your individual account information. You can view various documents including your payment history, your economic impact payments, and key information from your most recent tax return. You can also use it to make a payment online, access your tax records via Get Transcript, and approve or reject authorization requests from me to access your information. You can go to the IRS website, www.irs.gov, and click on Sign in to your account, to set it up.

Required Minimum Distributions from Retirement Accounts

Taxpayers are required to start taking required minimum distributions (RMDs) by April 1 of the calendar year following the year in which the individual reaches 73. However, it is generally better to take the distribution in the year you turn 73 so that two RMDs do not have to be taken in the next year.