Tax Changes and Key Amounts for the 2024 Tax Year
"There are lots of tax changes for 2024. Some reflect prior-year inflation. Others are new rules. But one thing is certain...all taxpayers are affected." - Joy Taylor
Check out these tax changes and key amounts for the 2024 tax year from Kiplinger:
Retirement plan changes
The SECURE 2.0 Act of 2022 bolsters retirement savings, with over 90 provisions with different effective dates. Among the changes that take effect this year are the following.
People under age 59½ can take more penalty-free early withdrawals from IRAs and 401(k)s. Up to $10,000 for domestic abuse victims and $1,000 for emergencies can be taken without paying the 10% additional tax. Regular income tax would still be due.
Leftover funds in 529 education accounts can be rolled over tax-free to a Roth IRA. There is a $ 35,000-lifetime cap. Yearly rollover amounts can’t exceed the annual pay-in limit for Roth IRAs, which is $7,000 for 2024. And the 529 account must have been open for more than 15 years.
Roth 401(k) owners no longer need to take required minimum distributions. This conforms to the rule that applies to owners of Roth IRAs.
Plan sponsors can create emergency savings accounts for participants, who could then make Roth pay-ins (on an after-tax basis) to that savings account within the plan. A participant’s account balance can’t exceed $2,500.
Student loan relief can be offered through workplace retirement plans. SECURE 2.0 allows employer 401(k) matches conditioned on student loan repayments made by employees.
The qualified charitable distribution cap is indexed for inflation so that IRA owners 70½ and older can transfer up to $105,000 in 2024 from their IRAs directly to charity without having to pay tax on the withdrawal.
Find more information on tax credits and deductions, key tax amounts, gift and estate tax exclusion, business tax changes and more HERE.
Article source: Tax Changes and Key Amounts for the 2024 Tax Year by Joy Taylor, Kiplinger