Rates have not changed since the 2018 tax act, however, the amount of income included in each
bracket has increased for inflation. So if you want to know what tax bracket your income falls
into, you can google the new 2024 brackets. These change every year.
You may be surprised this year when you receive a 1099K from the Zelle, or Venmo, or Paypal
processor you used to sell personal products or just get a reimbursement for meals you bought
with a friend. The 1099K is now required to be reported for any income over $5,000 – but some
of these processors will be reporting any income over $600, which will be the requirement in 2025.
The 2024 tax year is considered a transition year and so there is the option of a reporting
threshold of $600 or $5,000. In any case, personal reimbursements are not taxable and so you
need to know how to report the 1099K in your tax return and still not pay tax on it. In addition,
personal items sold at a loss are not taxable. So, your tax software should be able to guide you in
reporting these items properly.
There are some really good tax credits that came about with the Inflation Reduction Act last
year. The electric vehicle credit was simplified in this Act so that it is much easier to claim the
credit of $7,500, however, there are income limitations that you must be aware of. Additionally,
the Energy Efficient Home Improvement Credit is expanded to up to 30% of the cost of: home
insulation, windows and skylights, central ac, exterior doors, heat pumps, and heat pump water
heaters. This is in addition to the already available Residential Clean Energy Credit for Solar
energy.
For small businesses, the 100 percent bonus depreciation deduction will be reduced this year to
60 percent and go down 20 percent every year until it is phased out. The 2023 bonus was 80%.
However, the Section 179 depreciation deduction is still a good alternative for small businesses
to achieve the 100 percent deduction.
The best way to save on taxes is to plan ahead and get a good tax advisor. Tax laws change every
year and what we don’t know can and will cost us money. With the uncertainties of the economy
and inflation, even if a tax professional hasn’t been used before, now is the time. He or she can
provide guidance to make the right decisions in the face of these many unknowns.
A Certified Public Accountant is available to provide advice and help throughout the year. For
those that have financial decisions to make during the year, this advice could be invaluable. So,
most people would benefit greatly from the services of a CPA.
Ellen Rose is a Certified Public Accountant with more than 25 years’ experience. Her expertise
includes personal tax return preparation, business tax return preparation, tax planning, and IRS
and state tax resolutions services. She is the co-founder of Sternbach & Rose, CPAs, a full-
service accounting firm located at 115 E. Stevens Ave., Ste. 100, Valhalla, NY. For more information or to make an appointment for a free initial consultation to see if a fit is suitable, call 914-940-4449, email [email protected] or visit SandRcpa.com.
