2024 Tax Year Updates

Dear Client,

I trust that you are doing well.

As we move towards the end of 2024, I wanted to take a moment to share some important 2024 tax updates that may impact your financial planning for the remainder of the year:

• Standard Deduction Increase to: $14,600 for single filers and married couples filing separately and $21,900 for single heads of households. For married couples filing jointly, the standard deduction rises to $29,200. There are additional amounts for those over 65 and/or blind.

  
  

• 2024 Retirement Contribution Limits:

  • IRA Contributions: Up to $7,000. The catch-up limit for those 50 and older is $1,000, with adjustments for inflation in future years. Deductibility depends on income levels.

  • 401(k) Contributions: Up to $23,000. For those 50 and older, the catch-up limit remains $7,500, allowing total contributions of $30,500. This also applies to 403(b), most 457 plans, and the federal Thrift Savings Plan.

  • SIMPLE Plan Contributions: The catch-up limit for those 50 and older is $3,500.

    
    

• The RMD (Required Minimum Distribution) age is 73 - first RMD must be taken by April 1 after Dec. 31 the year you turn 73.

  
  

• Tax Bracket Adjustments: The income tax brackets have been adjusted for inflation. It's important to consider these changes when planning your income and withholding for the year.

  
  

• Child Tax Credit: The Child Tax Credit remains in place, but be aware of any income phase-out thresholds that could impact your eligibility.

  
  

• Energy Credits: If you plan on making energy-efficient home improvements or purchasing an electric vehicle, tax credits may be available to you in 2024. 

  
  

• The annual exclusion for gifts increases to $18,000 for calendar year 2024. 

  
  

• NJ’s deadline for seniors to apply for 2023 senior freeze (property tax reimbursement) is October 31, 2024.

  
  

Please keep these updates in mind as you plan for the upcoming tax year. I recommend scheduling a time to discuss any of these changes further, particularly if they might significantly impact your financial situation. I also encourage you to review the tax checklist available on my website to ensure that you have all the necessary documents and information for the next filing season.

Thank you for entrusting me with your tax preparation needs. I look forward to continuing our work together and helping you navigate any tax challenges that arise.

Best regards,

Thalia I. Treby, MS