Navigating tax law is a lot like trying to do a very difficult puzzle. Just when taxpayers think they have it figured out, lawmakers change the pieces, adding or adjusting the tax code in ways that can result in serious consequences for those who are not paying attention.
As such, taxpayers are wise to stay updated on the changes to make sure they are putting together the right puzzle. Three of the most recent changes to review include the following.
#1: Changes that will impact tax planning
Lawmakers recently enacted the SECURE 2.0 Act, a law that they claim will help encourage workers to transition into retirement. The law aims to achieve this goal by offering various incentives for workers to start using their retirement benefits. Changes scheduled to go into effect for this tax year include certain penalty free withdrawals from 401k and IRA accounts as well as the ability to roll over any funds that remain in a 529 education savings plan into a Roth IRA tax-free.
#2: EV deals remain
The Internal Revenue Service (IRS) recently announced that it will allow a clean vehicle tax credit on the purchase of new plug-in electric vehicles in 2023 or after. This can result in a credit of $7,500.
There are some limitations. The vehicle must be new, and taxpayers must have a modified adjusted gross income of $300,000 or less if married filing jointly and $150,000 or less if single to qualify for the credit.
#3: Adjustments to standard deductions
The federal agency also announced that it will adjust the standard deduction rate to account for annual inflation rates. The standard deduction rate for married couples filing jointly for the 2024 tax year will increase from $27,700 to $29,200 and the rate for those filing as single taxpayers will increase from $13,850 to $14,600.
These are just a few of the recent tax changes that can impact a taxpayer’s obligations in the 2024 tax year. Those who do not stay current with applicable changes can find themselves filing returns that do not reflect their tax obligations. This could result in allegations of an attempt to avoid one’s taxes and potentially escalate to serious accusations of wrongdoing.
Do not take initial questions about your tax filings lightly. The attorneys at Goldburd McCone have guided taxpayers in cases against the IRS and can help to better ensure that your rights are protected throughout the process and mitigate the risk of an escalation.