Tax Season 2024: Key Updates and New Reporting Rules

Expanded Direct File Program

The IRS has expanded its Direct File program to 25 states, providing a free and convenient option for tax filing. The portal now features enhanced functionality, including automatic W-2 importation and support for additional tax credits.

Income Limits for Direct File:

* Individual filers: Less than $200,000 annually
* Joint filers: Less than $250,000 annually
* Separate filers: Less than $125,000 each

Income ineligible for Direct File:

* Capital gains
* Rental earnings

1099-K Reporting Threshold Lowered

Businesses using third-party payment apps (e.g., Venmo, PayPal) now face a lowered 1099-K reporting threshold of $5,000 for 2023. This change aims to reduce tax fraud.

Standard Deduction Increases

The standard deduction for 2023 has increased to $14,600 for individuals and $29,200 for joint filers, further reducing the need for itemized deductions.

Free File Program Remains Available

Taxpayers earning less than $84,000 annually can still use the Free File system, a partnership between the IRS and tax preparation companies.

Direct File's Political Future Uncertain

The future of Direct File remains uncertain, with Republican lawmakers calling for its termination. Treasury Secretary nominee Scott Bessent has assured that it will continue operating for the current tax season.

Zelle Exempted from Reporting Requirements

Zelle does not issue 1099-Ks due to its unique operations. Taxpayers should report any incorrect 1099-Ks received from other apps as errors.