As the 2024 tax season unfolds, taxpayers are navigating a landscape influenced by various factors, from early filings driven by the desire to expedite refunds to ongoing negotiations regarding the Child Tax Credit (CTC).
Let’s delve into the intricacies of this tax season, providing a comprehensive guide to key elements that taxpayers should be aware of.
IRS Enhances Services for Seamless Process
The allure of securing tax refunds swiftly has led to a surge in early filings, with over half of Americans intending to capitalize on this trend, as revealed by a study from Intuit Credit Karma.
Acknowledging past challenges, the Internal Revenue Service (IRS) is leveraging funding from the Inflation Reduction Act to enhance customer service and streamline processes.
Mark Steber, Chief Tax Information Officer at Jackson Hewitt, emphasizes that filing early offers benefits beyond merely expediting refunds. Beyond the financial gain, early filers can safeguard their sensitive data against potential fraudsters who attempt to exploit Social Security and work data for deceptive filings.
The IRS is accepting federal tax returns until April 15, with exceptions for residents of Maine and Massachusetts, who have until April 17 due to state holidays.
Additionally, individuals in federally declared disaster areas benefit from extended filing deadlines. For those requiring more time, filing extensions can be requested, providing a deadline extension until mid-October.
Efficient refund processing is a priority for taxpayers, and the IRS aims to issue most refunds within 21 days, particularly for electronically filed returns.
If filed on the earliest day, January 29, taxpayers could anticipate refunds by February 19. However, the IRS acknowledges that some returns may undergo additional review, potentially extending the processing period beyond 21 days. Paper returns, by nature, generally entail longer processing times.
Taxpayers can monitor their refund status through the recently updated “Where’s My Refund?” tool on IRS.gov or the IRS2Go app. This tool now furnishes more detailed information, allowing taxpayers to see whether the IRS requires additional details from them.
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Navigating 2024 Tax Season
Ongoing negotiations regarding the Child Tax Credit (CTC) introduce an element of anticipation for parents filing their taxes in 2024.
While the potential for retroactive changes for 2023 exists, tax experts caution against delaying filings in anticipation of legislative developments. The IRS is likely to address any adjustments through subsequent payments or refunds.
To account for inflation, the IRS has modified tax brackets for both 2023 and 2024. In 2023, brackets witnessed a roughly 7% increase, while the adjustments for 2024 raised limits by approximately 5.4%.
These adjustments could yield varying refund amounts, particularly for workers whose income did not keep pace with inflation.
Anticipations for larger refunds in 2024 are prevalent, with potential increases of up to 10%, particularly for those whose income did not align fully with inflation adjustments.
According to Credit Karma, about three-quarters of Americans expect a tax refund, while one in four anticipates a larger IRS check in their favor.
As taxpayers navigate the complexities of the 2024 tax season, staying well-informed about these key aspects ensures a smoother filing process and a clearer understanding of potential refund outcomes. Remember, the sooner you file, the sooner you may receive your eagerly awaited tax refund, making the most of this pivotal financial event.
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