Tax Season 2024: What You Need to Know
As the official kickoff of tax season arrives, accountants across America are buzzing with excitement. While there haven’t been any major changes to the IRS code, there are a few key developments worth noting.
Expanded Direct File Program
The IRS’s Direct File program, which allows filers to submit their returns directly to the government for free, is expanding to 13 new states, bringing the total to 25. This year, the program comes with new features, including automatic W-2 importing and support for a wider range of tax circumstances. The IRS estimates that 30.3 million Americans will be eligible to use Direct File this year.
New Reporting Rules for Gig Workers and Small Business Owners
If you’re a gig worker or small business owner who receives payments through apps like PayPal or Venmo, you’ll need to be aware of new reporting rules aimed at reducing tax fraud. The IRS is now requiring these platforms to issue 1099-K forms for business income exceeding $5,000, down from the previous threshold of $20,000.
Free File System Still Available
If you make less than $84,000 a year, you’re still eligible to use the Free File system, which offers free tax preparation and filing through partnerships with private companies.
Standard Deduction Increases
The standard deduction is getting a significant boost this year, increasing to $15,000 for individuals and $30,000 for couples. This could make it easier for some filers to use free programs like Direct File.
What’s Next for Direct File?
While Direct File earned positive reviews last year, its future is uncertain. Republican lawmakers have called for its termination, and Treasury secretary nominee Scott Bessent has only committed to keeping it running for this tax season.
Get Ready to File
With these changes in mind, it’s time to start preparing your tax return. Head to the IRS website to determine your eligibility for Direct File and explore other free filing options.
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