Tax Alpha for 2024: 5 Key Takeaways

Individual and business taxpayers alike are facing a number of important changes under the new tax law. Here are five key takeaways:

1. The standard deduction has increased significantly. For 2024, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly. This is an increase of $2,000 and $4,000, respectively, from the 2023 standard deduction amounts.
2. The child tax credit has been made permanent. The child tax credit is now a fully refundable credit worth up to $2,000 per child under the age of 17. This means that even taxpayers who owe no taxes can receive the full amount of the credit.
3. The earned income tax credit has been increased. The earned income tax credit is a tax credit for low- and moderate-income working individuals and families. For 2024, the maximum amount of the EITC is $7,850 for taxpayers with qualifying children and $1,930 for taxpayers without qualifying children.
4. The qualified business income deduction has been expanded. The qualified business income deduction (QBI) is a deduction for small business owners. For 2024, the QBI deduction has been increased from 20% to 25% of qualified business income.
5. The estate tax exemption has increased. The estate tax exemption is the amount of money that can be passed on to heirs without being subject to estate tax. For 2024, the estate tax exemption is $12.92 million per individual, up from $12.06 million in 2023.

These are just a few of the key changes under the new tax law. Taxpayers should consult with a tax professional to determine how these changes will affect their specific situation.

Tax Planning Tips

In addition to the changes outlined above, there are a number of other tax planning tips that taxpayers should keep in mind for 2024. These tips include:

• Max out your retirement contributions. Contributions to retirement accounts, such as 401(k)s and IRAs, are tax-deductible. This means that you can reduce your taxable income by contributing to these accounts.
• Consider itemizing your deductions. If your itemized deductions exceed the standard deduction, you may be able to save money on your taxes. Common itemized deductions include mortgage interest, state and local taxes, and charitable contributions.
• Take advantage of tax credits. Tax credits are dollar-for-dollar reductions in your tax liability. There are a number of tax credits available to individuals and businesses, including the child tax credit and the earned income tax credit.
• Plan for estimated taxes. If you expect to owe more than $1,000 in taxes, you may be required to make estimated tax payments throughout the year. This will help you avoid penalties when you file your tax return.

By following these tips, taxpayers can reduce their tax liability and save money.

Economic Impact of Tax Alpha

The Tax Alpha is expected to have a significant impact on the U.S. economy. According to the Congressional Budget Office (CBO), the Tax Alpha will boost economic growth by 0.7% over the next decade. The CBO also estimates that the Tax Alpha will create 1.7 million new jobs over the next decade.

The Tax Alpha is also expected to have a positive impact on the stock market. According to Goldman Sachs, the Tax Alpha could boost the S&P 500 index by 10% over the next year.

Conclusion

The Tax Alpha is a major piece of legislation that will have a significant impact on individuals, businesses, and the economy. Taxpayers should consult with a tax professional to determine how the Tax Alpha will affect their specific situation and take advantage of the tax planning opportunities that are available.

Additional Resources

• IRS website
• CBO report on the Tax Alpha
• Goldman Sachs report on the Tax Alpha