Alliance Tax Recommends all Clients Create an Individual IRS Online Account

Setting up an IRS online account has many benefits. You can securely access and view your IRS tax information anytime through the individual online account. You have the option to:
-    Review Federal estimated payments made during the year or refunds applied as a credit..
-    Review Federal amounts owed for past tax years. Payment history. Payment plan details.
-    Print digital copies of IRS notices.
-    Request Federal tax records/tax transcripts.
-    Schedule Federal payments.
To create an IRS online account, each individual taxpayer needs to visit:
https://www.irs.gov/payments/view-your-tax-account

2024 Standard Deduction Amounts
Setting up an IRS online account has many benefits. You can securely access and view your IRS tax information anytime through the individual online account. You have the option to:

For 2024, the standard deduction amount has increased for all filers, and the amounts are as follows:
-    $14,600 Single or Married filing separately
-    $29,200 Married filing jointly or Qualifying surviving spouse
-    $21,900 Head of household
Taxpayers who are at least 65 years old or blind can claim an additional 2024 standard deduction of $1,550 ($1,950 if using Single or Head of household filing status) for each taxpayer on a Married filing jointly return, and each taxpayer who is blind.

Charitable Donations
For 2024, IRA owners who are age 70 ½ or older had the option to transfer up to $105,000 to a charity tax free by making a Qualified Charitable Distribution, or QCD. QCDs must be made directly by the trustee of the IRA to the charity in order to qualify for tax-free treatment, and must be made by December 31, so the IRA owner should contact their IRA trustee in time to complete the transaction by the end of the year. All other charitable donations must be claimed as a deduction on Schedule A.  
 

2024 Standard Mileage Rates
For 2024, the following rates are in effect:

-    67 cents per mile for business use
-    21 cents per mile driven for medical purposes
-    14 cents per mile driven in service of charitable organizations
 

Digital Assets/Virtual Currency/Cryptocurrency
The IRS treats virtual currencies as property, meaning it is taxed in a manner similar to stocks or real property. The IRS is focusing on cryptocurrency/digital asset tax evasion with virtual currencies, employing data analytics to uncover transactions that crypto users assumed were hidden. Form 1040 asks whether at any time during 2024, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

If the answer is Yes, you must provide a record of all your transactions. This includes how much you paid for the digital asset, if purchased, how long you held the asset, and how much you sold it for. You must have receipts for each transaction. More information may be required to complete your 2024 tax return.

Form 1099-K
If you received payments through apps like Venmo, PayPal, or Cash App in 2024, you may receive Form 1099-K in early 2025. The IRS has recently announced another postponement of the implementation of the $600 reporting threshold; a 1099-K will only be issued if a taxpayer has over $5,000 in payments during 2024. For 2025, the IRS is planning for a decreased threshold of $2,500 as part of a phase-in of the new rules which were enacted under the American Rescue Plan. The $600 threshold will take effect in 2026.

Retirement Savings
For 2024, the annual contribution limit will increase to $7,000 and the catch-up contribution limit will stay at $1,000 for individuals 50 or older. The elective salary deferral limit for employees who contribute to a retirement savings plan like a 401(k) will increase to $23,000 in 2024, with catch-up contribution dollar limit of $7,500 for employees who are age 50 or older.

Energy Related Credits
These expenses may qualify if they meet requirements detailed on energy.gov:

• Exterior doors, windows, skylights and insulation materials

• Central air conditioners, water heaters, furnaces, boilers and heat pumps

• Biomass stoves and boilers

• Home energy audits

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
2022: 30%, up to a lifetime maximum of $500
2023 through 2032: 30%, up to a maximum of $1,200 (heat pumps, biomass stoves and boilers have a separate annual credit limit of $2,000), no lifetime limit
https://www.irs.gov/credits-deductions/home-energy-tax-credits

Residential Clean Energy Credit
These expenses may qualify if they meet requirements detailed on energy.gov:

• Solar, wind and geothermal power generation

• Solar water heaters

• Fuel cells

• Battery storage (beginning in 2023)

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:
2022 to 2032: 30%, no annual maximum or lifetime limit
2033: 26%, no annual maximum or lifetime limit
2034: 22%, no annual maximum or lifetime limit
https://www.irs.gov/credits-deductions/home-energy-tax-credits

Credits for new clean vehicles purchased in 2023 or after
If you place in service a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit.
At the time of sale, a seller must give you information about your vehicle's qualifications. Sellers must also register online and report the same information to the IRS. If they don't, your vehicle won't be eligible for the credit.
You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
The credit is available to individuals and their businesses.
To qualify, you must:
Buy it for your own use, not for resale
Use it primarily in the U.S.
In addition, your modified adjusted gross income (AGI) may not exceed:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
The amount of the credit depends on when you placed the vehicle in service (took delivery), regardless of purchase date.
For vehicles placed in service January 1 to April 17, 2023:
$2,500 base amount
Plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity
Plus $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours
Up to $7,500 total

In general, the minimum credit will be $3,751 ($2,500 + 3 times $417), the credit amount for a vehicle with the minimum 7 kilowatt hours of battery capacity. For vehicles placed in service April 18, 2023 and after: Vehicles will have to meet all of the same criteria listed above, plus meet new critical mineral and battery component requirements for a credit up to:
$3,750 if the vehicle meets the critical minerals requirement only
$3,750 if the vehicle meets the battery components requirement only
$7,500 if the vehicle meets both
A vehicle that doesn't meet either requirement will not be eligible for a credit.
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Missouri Standard Deduction Amounts
For 2024, the standard deduction amounts allowed by Missouri match the increased Federal standard deduction amounts:
- $14,600 Single or Married filing separate
- $29,200 Married filing combined or Qualified Widow(er)
- $21,900 Head of household

Additional standard deduction amounts for age 65 or older and blind:
$1,550 for each occurrence on a Married filing jointly, Married filing separately, or Qualifying surviving spouse return: or
$1,950 for Single or Head of household filing statuses.

2024 Missouri Active and Inactive Duty Military Tax Deduction
- 100% of military income for 2024

2024 Missouri Other Changes
Missouri Working Family Credit, updated in 2024, credit up to 20% of federal earned income credit (up from 10% in 2023). This cannot be refunded but can reduce tax owed.