Tax Law Changes for 2024

44Taxes are a never-ending story. Now that most of you have filed your 2022 forms, it’s time to start planning the next tax year. And for that, you need to be aware of the new changes and regulations so that you don’t have to refile the forms or pay the penalties. 

This article focuses on the new tax law changes you need to know for 2023. 

Key Takeaways 

• In 2023, the income threshold for tax brackets has been increased by 7% from 2022. 
•  Long-term capital tax rates remain the same in 2023 with an adjusted income threshold. 
• Standard and additional deductions have been adjusted depending on the filing status. 
• The 1099-K form will be given to vendors who accept payments through a third party where a transaction is over $600. 

Tax Law Changes for 2024

Tax Brackets

Due to the rising inflation, the tax brackets for 2023 are wider and will remain so until 2025. These tax brackets are adjusted yearly to match your yearly expenses and reflect the increased cost of living. 

The table below shows the federal income tax rates for 2024 from 10% to 37%. See which category you fall under and file your taxes accordingly. You will notice that there is a 7% increase in tax brackets in 2023 compared to 2022. Hence, you might as well be paying lower taxes this year than before.

Long-Term Capital Gains Tax Rates for 2024

Capital gains are the funds you receive for selling your assets after owning them for more than a year. The good news is that the capital tax rates did not change for the new year of 2024; there are three rates remaining: 0%, 15%, and 20%. What has changed is the income you need to make in order to qualify for each of these rates.

Here are the adjusted income thresholds for 2023:

There is an additional 3.8% tax on some of these capital that are subject to the net investment income tax (NIIT). The income threshold depends on the income and your filing status:

• Single or Head of household – $200,000
• Married filing jointly – $250,000
• Married filing separately – $125,000

Standard Deduction

There have been some adjustments introduced for standard deduction in 2023. As of now, the deduction amounts have increased to:

Additional Standard Deduction

Tax filers over 65 years old or/and blind can take advantage of an additional tax deduction, which has also increased in 2024. Here is a comparison table:

1099-K Forms

This is the form for vendors who accept payments through third parties like PayPal, Stripe, Square, and others. Previously, vendors who processed over 200 third-party payments that totaled $200,000 had to file this form. The upcoming law change will now affect smaller businesses, too. 

This form will be due 2024 tax season and touches every vendor who processes payments over $600 through a third party. A single transaction is enough for the IRS to make you file this form. 

Note that personal gifts are not subject to tax. 

Most Important Proposed Tax Law Changes 2024

2023 is a year of changes, as we can see from these adjustments in tax laws. The IRS modifies the deductions and limits every year so that the amount matches the current cost of living. 

For some, these changes will be beneficial as they can be a part of smaller tax rates, while others will find them challenging, as the 1099-K form is. Whenever you feel like you’re out of money and need an emergency credit to cover the expenses, Income Tax Loan Now is here to give you a helping hand. 

You can instantly borrow money with reasonable interest and enough time to repay. Apply now and see your options.