As the 2024 tax season approaches, both federal and Connecticut state taxpayers should be aware of several key changes that may impact their filings. At the federal level, the standard deduction has increased due to inflation adjustments. For single filers and married individuals filing separately, the deduction is now $14,600; for heads of household, it’s $21,900; and for married couples filing jointly, the deduction has risen to $29,200. Additionally, tax bracket thresholds have been adjusted to account for inflation, which may affect your marginal tax rate.
In Connecticut, significant income tax reforms have been implemented to benefit middle-class residents. Effective January 1, 2024, the tax rate on the first $10,000 of income (or $20,000 for married couples filing jointly) has been reduced from 3% to 2%. For the next $40,000 of income (or $80,000 for joint filers), the rate has decreased from 5% to 4.5%. These reductions aim to provide substantial relief to taxpayers within these brackets.
Taxpayers should also be mindful of new federal reporting requirements. Individuals selling items online may receive a Form 1099-K if their sales exceed $5,000, indicating taxable income that must be reported, even if not all sales resulted in profit. Additionally, buyers of electric vehicles are now required to report their purchase on tax returns to verify eligibility for tax credits.
To navigate these changes effectively, consider utilizing available resources. The IRS has expanded its free filing options, including an enhanced Direct File program now available in 25 states, and the IRS Free File service for individuals with incomes under $84,000. Connecticut taxpayers should review the updated state tax brackets to understand how the new rates apply to their income. Staying informed and utilizing these tools can help ensure a smoother and more accurate filing experience this tax season.
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