Tax Season 2024: Essential Updates for Filers
Expanded Direct File Program
The IRS has expanded its Direct File program to 25 states, streamlining tax filing for eligible individuals. Key enhancements include:
* Direct W-2 import from the IRS
* Support for various tax credits, including Earned Income Tax Credit and Affordable Care Act's Premium Tax Credit
* Strict income limits: $200,000 for individuals, $250,000 for joint filers, and $125,000 for separate filers.
Despite positive reviews, customer service may be affected due to the federal hiring freeze. The program's political future remains uncertain.
Free File Option
Eligible taxpayers with incomes below $84,000 can utilize the Free File system, administered by the IRS and private tax-preparing companies. Usage increased by 10% in 2023.
1099-K Reporting Changes
Third-party payment apps like Venmo and PayPal must now issue 1099-K forms for business transactions exceeding $5,000. This measure aims to combat tax fraud.
Larger Standard Deductions
The standard deduction has been significantly increased: $14,600 for individuals and $29,200 for couples. This makes it easier for taxpayers to simplify their filing process using free options like Direct File.