If you don’t want your 2024 tax return to be a headache, here are some new tips to help things go smoothly. Don’t worry, it’s not too difficult if you take it slowly and avoid the common mistakes that make us all sweat. Ready to learn some tricks?
The first golden rule is: don’t rush. Before you send your tax return, make sure you have all of your paperwork in order. If something is missing or there are errors, fix it right away. A poorly placed detail can cause your refund to be delayed or even get you in trouble with the IRS. Better safe than sorry!
Credits that are your best ally (and other key changes)
Did you know that this year, there are changes that could put more money in your pocket? For example, the ACTC increased to $1,700 per qualifying child. And if you live in Puerto Rico, you can now claim it with only one child, rather than three or more. Take advantage of this!
The Child Tax Credit (CTC) remains a top benefit: $2,000 per child; however, it is reduced if you earn more than $200,000 (or $400,000 if you file jointly). In addition, your child must be under 17 and meet certain requirements. Do you have any doubts? Examine the rules on the IRS website.
Standard deduction: more money in your pocket
This year, the standard deduction went up, and that’s pure profit. See the updated numbers:
- Single or married filing separately: $14,600.
- Head of household: $21,900.
- Married filing jointly: $29,200.
Feel like a pro and use these figures to your advantage. Also, the EITC (income credit) has a new rule: if you do not have children, you must be between 25 and 65 years old to claim it.
Bonus: special credits that you can’t miss
Adopting a child is a joyous occasion, and the tax system provides some assistance with the significant costs involved.
If you completed the adoption of a child in 2024, you may be eligible to receive the Adoption Credit. This credit can provide significant financial relief, with a maximum credit of $16,810 per adopted child.
The push for cleaner transportation has resulted in tax credits for those who buy qualifying electric or hybrid vehicles. If you bought a new or used electric vehicle or a plug-in hybrid in 2024, you may be able to claim a credit Review Form 8936; you may also be eligible for a large loan.
Save for retirement: For the 2024 tax year, IRA contribution limits have been increased. Your IRA contribution limit increased to $7,000 (or $8,000 if you’re over 50).