WASHINGTON, D.C. (7News) — January 29 is the official start of the 2024 tax filing season. That means starting Monday through April 15, you can file your 2023 returns.
The big change this year is the standard deduction has been increased due to inflation. It's the second-largest hike in three decades. As a result, you could owe less in taxes or see a bigger refund.
"The standard deduction this year is actually a 5.4% increase," Nesha Lopez, CEO of 360 Lifetime, said. "What it does for taxpayers is it lowers your tax liability, meaning lower taxes for most individuals."
Congress is debating changes to the Child Tax Credit.
If you qualify, you could get a bigger deduction per child.
"The Child Tax Credit. It's a credit whereby families with lower incomes. Families can receive up to $2,000 per child under 17 years old, the current limit is $1,600," Lopez said.
There are also breaks for business owners.
"Business owners will receive 100% depreciation on equipment, as well as research and development. That will be huge, tremendous for businesses," Lopez said.
Many tax filers are unsure whether they should itemize or take the standard deduction.
“So it really is going to depend on what tax bracket that you're in. The standard deduction has increased this year, allowing you basically a bigger deduction that you can write off or save more money on taxes based on which tax bracket you're in," Lopez said.
Married couples generally do better filing jointly, but not always.
"Some of the times I'll run different scenarios, because I'll find that in higher earning income tax brackets, it's better to file separately," Lopez said. "The biggest tax savings break that I see, is itemizing if you can. Another one is your pre-tax deduction. If you're an individual, you can now stash up to $23,000 away in a 401K or 403B. Your health savings account, your flexible spending accounts, .. those are major ways to save."
Start by getting organized. Get all your tax documents ready so they can be easily accessed. If you need to file an extension, do that by April 15, the tax deadline. You can file the paperwork later, but you still need to pay your taxes on time.
ncG1vNJzZmivmpawtcKNnKamZ56axLR7zZqroqeeYsSwvsudZmtoYml6ta3XZp2ipJmjtG6%2FxJqqqKZdl7Kotc2sZKydk6S7pXnLmqmgnaOperTAwKebmqqUYrGmsNScq6KnnmK1qrfEZqCnnpyWwaq7zWakqKaVrnqjrcKkZKudlqq7pXnIq6pmnpmhsm7AwLGnmrGVp8BussCmoKWhlah6tLXNoKOeZZGlv6q4jGpsZp6fp7q0ecOemJ2kmaOybrzAsmSoppyeu6Y%3D