Standard Deduction and Personal Exemption

Standard deductions increase slightly for 2024 as follows:

Single = $14,600

Married Filing Joint = $29,200

Head of Household = $21,900

Child Tax Credit

The credit for 2024 is as follows (subject to AGI limitations):

$2,000 for each child under the age of 17 (17 year old children are not eligible for the credit in 2024)

Medical Expense Deduction

The AGI threshold for 2024 remains at 7.5%.  Therefore, any out of pocket medical expenses you incur above 7.5% of your AGI (and you exceed the standard deduction amount) can be deducted. You must be able to itemize deductions to qualify.

Charitable Contributions

The 60%-of-AGI limit on deductions for CASH donations by individuals who itemize is in effect for 2024. You must itemize on Schedule A and does not include excess charitable contributions from prior years.

Capital Gains

1. Short-term capital gains are still taxed as ordinary income for investments held less than one year.

2. Long-term capital gains tax rates rates remain the same (0%, 15% or 20%) depending on filing status and income level. Income thresholds for each rate increase slightly for 2024.

3. The 3.8% net investment income tax rate (Medicare surtax) that applied to high earners remains the same.

Businesses

1. Business meals for 2024 remain 50% deductible. This includes client meals as well as meals for employees on business travel.

2. Pass through companies (S-Corporations, Partnerships, LLCs and sole proprietors) still receive a 20% deduction of qualified business income.  The taxable income limitation thresholds increase in 2024 ($383,900 married/$191,950 single). This deduction is complex and does have certain restrictions for service-type companies (law, accounting, health and financial services), so please contact me if you have specific questions.

3. 60% Bonus Depreciation for the purchase of certain assets that are put into use during the 2024 tax year. This deduction will decrease to 40% in 2025.

4. Business mileage rate for 2024 is $0.67 per mile.

5. The C-Corporation tax rate remains at a flat 21%.

There are many more small changes to both business and individual taxes, but this blog was intended to educate you on the major changes that effect the majority of taxpayers.  If you have any specific examples or items you would like to discuss, please contact me!

In order to stay ahead of the newest IRS Deadlines, please take note of the following dates:

January 15, 2025

4th Quarter 2024 Estimated Tax Payment Due

January 27, 2025

2024 Tax Season begins. IRS begins to accept 2024 tax returns

January 31, 2025

2024 W-2, 1099-MISC, 1099-NEC Filing Deadline for Businesses
(Must provide to employee/contractor and file with IRS/SSA)

March 15, 2025

S-Corporation (1120S) Tax Returns Due for 2024 Tax Year

Partnership (1065, including multi-member LLC) Tax Returns Due for 2024 Tax Year

S-Corporation and Partnership Extension Requests Due for 2024 Tax Year

April 15, 2025

Individual (1040) Tax Returns Due for 2024 Tax Year

Trust and Estate (1041) Tax Returns Due for 2024 Tax Year

C-Corporation (1120) Tax Returns Due for 2024 Tax Year

Individual Tax Return Extension Request Due for 2024 Tax Year

1st Quarter 2025 Estimated Tax Payment Due

Last day to make a 2024 IRA Contribution

May 01, 2025

Deadline to renew your Florida formed Corporation (S-Corps, C-Corps and LLCs) or Partnership with the Florida Department of Revenue (Sunzbiz.org)

June 16, 2025

2nd Quarter 2025 Estimated Tax Payment Due

September 15, 2025

S-Corporation (1120S) Extended Returns Due for 2024

Partnership (1065) Extended Returns Due for 2024

3rd Quarter 2025 Estimated Tax Payment Due

October 15, 2025

Extended 2024 Individual Tax Returns Due

Extended 2024 C-Corporation Tax Returns Due

January 15, 2026:

4th Quarter 2024 Estimated Tax Payment Due

Since 2022, there have been extensive fraudulent letters being mailed to US taxpayers that appear to be from the Internal Revenue Service. These letters may look legitimate to your average taxpayers who are not experienced with the formatting of an official correspondence letter from the IRS. Many versions of these fraudulent letters are circulating, but a professional tax preparer should be able to identify the clear errors within these letters. Please read the following tips and take a look below at some of the fraudulent letters my clients have received.

Key tips:

1. If you receive any letters that have the IRS logo or claim to be from the Internal Revenue Service or US Department of Treasury, always reach out to a professional tax preparer or CPA before responding to the letter.
2. NEVER give out your social security number over the phone. The IRS has multiple ways of identifying you as the correct taxpayer without asking you for your full social security number.
3. If you call a number listed on an official IRS letter, you will ALWAYS hear an automated welcome recording from the Internal Revenue Service that places you in a queue and asks for many phone prompts before you ever talk with an IRS agent. You are usually on hold for 30 minutes to an hour or longer on average. If you speak with an individual immediately upon calling a number in a fraudulent letter, this should be your first sign to hang up and not give any personal information.
4. IRS agents always provide their name and IRS agent ID when they are first connected with a taxpayer over the phone. It is good practice to write this information down in case you need to escalate your inquiry.
5. The IRS never refers to a tax return or tax year as a full date (ex. Dec 31, 2021). They always refer to a tax period by year only (ex., 2021)

If you have called a phone number from a fraudulent IRS letter and provided any personal information (social security numbers, home address, bank information, etc.), you should immediately complete an IRS Form 14039 Identity Theft Affidavit and submit to the IRS. This will allow the IRS to flag your tax accounts so if there are any fraudulent activities on future tax returns or tax returns you have already filed, you can easily make corrections and prevent incorrect penalties from being applied to your accounts. You will also want to apply for an IRS Identity Theft PIN number which will be required to be included on all future tax returns you file.

The IRS also has valuable information for identifying and avoiding scams in this help article: “Avoid scams: Know the facts on how the IRS contacts taxpayers“

For your reference I have included a legitimate letter from the IRS and some examples of actual fraudulent letters my clients have received. Please use these as a reference anytime you receive a letter regarding your taxes. Finally, please reach out to me anytime you receive a letter from the IRS or any State agency regarding your taxes.

SAMPLE: CORRECT IRS LETTER

SAMPLE: FRAUDAULENT IRS LETTER

SAMPLE: FRAUDAULENT IRS LETTER

SAMPLE: FRAUDAULENT IRS LETTER