Getting organized early to file your 2024 tax return can reduce stress and help you file on time. Start planning now to ensure your return is in order and you maximize credits and deductions that can lower your tax bill.
The IRS processed 163 million individual tax returns last year with an average processing time of 21 days, and an average refund of $3,050. It is in your best interest to file early and receive any refund due to you quickly. But how do you begin?
Tips and changes for the 2024 filing season
Get Organized. The biggest hurdle to filing on time is not having the records you need to complete your return. Visit the IRS Get Ready webpage for filing tips. Put all tax-related mail in one place as it arrives. Here’s a handy timetable for when to expect your statements.
Will you get a refund? Use this handy tax refund calculator to determine the best filing status for your situation. If you are married, consider doing your taxes two ways to determine which filing status saves you the most: married filing jointly, or married filing individually.
Standard Deductions
Single and married taxpayers filing individually can take a standard deduction of $14,600 for 2024 if they do not itemize on their return. The standard deduction for married couples filing jointly is $29,200 and $21,900 for single heads of household with one or more dependents.
Deductions vs. Credits
Credits are dollar-for-dollar reductions to the total tax you owe, while deductions lower your taxable income. Here is a helpful guide to how they work.
Refundable Tax Credits
If you are eligible for a tax credit, and it is more than the tax you owe, you will receive a refund for the difference. Popular credits for low-income families are the Earned Income Tax Credit, with a minimum credit of $600, and the Child Tax Credit. The maximum credit per child is $2,000 in 2024. An Additional Child Tax Credit may provide certain filers with a partial refund per child.
Child and Dependent Care Credit
The IRS will allow a Child and Dependent Care Credit of up to $2,000 for each qualifying child. Those with dependents over 17 may qualify for the Credit for Other Dependents (ODC) of up to $500.
Saver’s Credit
If you contributed to a qualified retirement savings program last year, such as an IRA or 401(k), you may be eligible for a credit of up to $1,000 depending on adjusted gross income.
Help with Healthcare
The Premium Tax Credit reduces the cost of health insurance premiums for qualified plans bought through a health insurance marketplace.
Before completing your Ohio tax return, review the list of Ohio credits to see if you qualify for more savings. Filing taxes can be stressful. But being prepared could possibly increase your refund. Midwest Community’s financial coaches are a great resource for exploring how you can invest your refund to save for a future goal. Contact them today for advice!
