Monday marks the first day that the IRS will start accepting and processing 2024 income tax returns.
If you are eager to receive your tax refund promptly or pondering how long you can delay submitting your return, here is essential information along with some suggestions to simplify the tax process.
ilkercelik/E+/Getty Images via CNN Newsource
Be clear on your filing deadline
The official IRS filing and payment deadline this year is April 15, unless you:
For individuals and businesses residing in areas declared as federal disaster zones, the IRS typically allows extensions for filing and paying income taxes, as well as other federal tax duties within a specific period. Detailed relief announcements by disaster-stricken regions can be accessed on the IRS website. For instance, due to the wildfires in the Los Angeles area, the IRS extended the tax deadlines to October 15 for affected counties.
If you are unable or prefer not to file by April 15, it is acceptable as long as you request an automatic six-month extension before that date. Keep in mind that this extension only pertains to filing your 2024 return and does not extend the deadline for paying any owed taxes. If you have any outstanding tax liabilities for the 2024 tax year, April 15 remains your payment due date.
Figure out if you can file for free
The IRS Direct File program, which lets eligible taxpayers file their taxes directly with the IRS for free, is now available in 25 states, up from 12 last year when the agency piloted the program.
The states are: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Jersey, New Hampshire, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington State, Wisconsin and Wyoming.
In addition, the IRS is partnering with certain private-sector tax preparation software firms that will let you file for free if you qualify. Generally speaking, it is only for filers whose adjusted gross income is $84,000 or less. Beyond that each of the private-sector partners has its own eligibility criteria based on factors such as age, income and state residency, but all offer “active-duty military personnel with an AGI of $84,000 or less in 2024, free tax preparation and filing using IRS Free File,” according to the IRS.
Review your 2023 income tax return
Your prior year return will give you a good starting point for figuring out what documents you need to have handy to fill out your 2024 return, said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals.
List big changes that happened in 2024
Got married or divorced? Had a baby? Started a side gig for more income? Sold a home or other big investment? Started receiving Social Security or inherited IRA payments? Lost a job and collected unemployment benefits?
Big life transitions and income changes may have a direct effect on your tax liability – including the tax breaks you can take, and the size of your refund – or the amount of additional tax you will owe.
Gather all your 2024 tax documents
While you may receive paper versions of 2024 tax documents, others may only be delivered electronically. So check your mailbox, your email and your relevant online accounts to ensure you have received all the W2s, 1099s, donation receipts and any other income tax information forms you will need from your banks, brokerages, employers, favorite charities, etc.
Watch for new 1099-K forms
If you were paid for goods and services you provided through payment apps or via online marketplaces like Venmo, CashApp, Airbnb and Etsy, you may be getting a 1099-K reporting your transactions if, combined, they exceeded $5,000 for the year. (The old threshold used to be $20,000.)
You might also get a 1099-K if those combined transactions were less than that, especially if you live in Maryland, Massachusetts, Vermont or Virginia, where the reporting threshold is set at $600.
If you get a 1099-K in error – e.g., the form includes transactions that were personal in nature – check this IRS document for some tips on how to correct the situation.
But, generally speaking, the IRS expects you to report all the 1099-K information you receive on your 2024 return. Then adjust for any errors either on that return using Schedule 1 or via an amended return after you filing your original by your filing deadline (which you should do to avoid penalties if you owe money).
Bought an EV? Keep an eye out for this form
If you purchased an electric vehicle, that qualifies for the clean vehicle energy credit or used clean vehicle credit. Your dealer should send both you and the IRS a Form 15400, known as a Clean Vehicle Seller Report. Information from it should be reported on your return to help you claim or reconcile the credit your claim on your return, according to NATP.
Separate chatter from reality on the state and local tax deduction
There is a lot of talk about increasing the state and local tax deduction. None of it applies to your 2024 tax return. Lawmakers may change the deduction going forward but for now it is still capped at $10,000.
So, if you are itemizing your deductions or calculating whether it’s worth doing so – which it would be if all your itemized deductions combined exceed your standard deduction – then you will only be able to deduct up to $10,000 for the state and local income, property and sales taxes you paid last year.
What to know about your potential refund
The only real reason most people are eager to file their return is if they’re owed a refund.
The majority of all US tax filers typically do get a refund, which the IRS usually issues within 21 days of accepting your return. But the agency notes on its site that if you are claiming an Earned Income Tax Credit, the IRS cannot by law issue the EITC-related refund before mid-February.
To track the status of your refund after you file, you can use the agency’s Where’s My Refund tool.
The CNN Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
