Preparing for the 2024 tax season requires strategic planning and knowledge of key changes that could affect your return and potential refund.
At a Glance
- The deadline for filing 2024 tax returns is April 15, 2025, with standard deduction amounts increasing to $14,600 for single filers and $29,200 for married filing jointly
- All income sources must be reported, including wages, retirement income, self-employment earnings, investments, rental income, alimony, and gambling winnings
- The Additional Child Tax Credit has increased to $1,700 per qualifying child, while the regular Child Tax Credit remains at $2,000
- IRA contribution limits for 2024 have increased to $7,000 ($8,000 for those 50 or older)
- Free filing options include IRS Free File, Free File Fillable Forms, Direct File, MilTax, and VITA/TCE programs
Essential Documentation for 2024 Returns
As the 2025 tax filing season approaches, gathering the right documentation is crucial for an accurate and efficient filing process. The foundation of a properly prepared tax return begins with personal information – Social Security numbers and dates of birth for yourself, your spouse, and all dependents. These details are non-negotiable and must be accurate to avoid processing delays and potential audits that could cost you time and money.
Income documentation represents another critical element of your tax preparation. Every dollar earned must be accounted for, including W-2 forms from employers, 1099 forms for independent contractors, retirement income statements, investment earnings reports, and documentation for rental income, alimony, and even gambling winnings. The IRS cross-references these documents with what’s reported on your return, making thoroughness essential.
“A good place to start when gathering all your required documents for the year is to grab last year’s tax return. Check for the types of income that were included on that return, as well as any forms and worksheets that calculated deduction or credit carry forwards, such as for capital losses, passive activity losses, charitable contributions, home office expenses, foreign income taxes, depreciation, or business-related net operating losses.”, said Kelly Wallace.
Important Changes for 2024 Tax Returns
The IRS has implemented several significant changes for the 2024 tax year that could substantially impact your filing and potential refund. Standard deduction amounts have increased across all filing statuses: $14,600 for single filers or married filing separately, $21,900 for head of household, and $29,200 for married couples filing jointly. This adjustment helps offset inflation and potentially reduces your taxable income compared to previous years.
For families, the Additional Child Tax Credit has increased to $1,700 per qualifying child, while the regular Child Tax Credit remains at $2,000 per child. Importantly, Puerto Rico residents can now claim the ACTC with one or more qualifying children, expanding this benefit to more American families. The credit begins to phase out at $200,000 of adjusted gross income for single filers and $400,000 for joint returns.
Retirement savers will benefit from increased IRA contribution limits, now set at $7,000 for 2024, with an additional $1,000 catch-up contribution allowed for those 50 or older. This change provides greater opportunity to build tax-advantaged retirement savings. Additionally, the Adoption Credit and exclusion for employer-provided adoption benefits have increased to $16,810 per eligible child, with phase-outs beginning at $252,150 AGI.
Navigating Payment Options and Deadlines
Understanding payment requirements and deadlines is critical for avoiding penalties and interest. Remember that filing an extension only extends the time to submit your paperwork, not the deadline to pay taxes owed. Any unpaid taxes after April 15, 2025, may accrue interest and penalties, even with an approved extension. This distinction is often misunderstood and can lead to unexpected costs for unprepared taxpayers.
For those who cannot pay their full tax liability immediately, the IRS offers several payment options. These include short-term payment plans, installment agreements, Currently Not Collectible status for those experiencing significant financial hardship, and Offer in Compromise arrangements for settling tax debts for less than the full amount owed. Each option has specific qualifications and application processes, making professional guidance valuable for complex situations.
Free Filing Resources and Professional Assistance
The IRS provides multiple free filing options to help taxpayers meet their obligations without incurring preparation costs. IRS Free File offers guided tax preparation for those with adjusted gross incomes of $73,000 or less, while Free File Fillable Forms is available to all taxpayers regardless of income. The new Direct File program allows eligible taxpayers to file directly with the IRS, while MilTax offers free filing services for military members and their families.
For taxpayers with more complex situations, seeking professional assistance may be worthwhile despite the cost. Tax professionals can identify deductions and credits you might miss, help navigate complex tax law changes, assist with proper documentation, and represent you in case of an audit. They can also provide strategies for minimizing future tax liabilities and ensuring compliance with all applicable tax laws and regulations.