Tax season 2024 brings changes that reshape deductions and credits for investors and consumers alike. The IRS has updated reporting requirements for third-party payment platforms, affecting anyone who sells goods online through Etsy, eBay, or Shopify. These platforms now report gross sales figures to the IRS starting this year, which means sellers must reconcile their records carefully to avoid audit triggers.
Electric vehicle buyers get expanded access to federal tax credits. The IRS clarified that used EV purchases now qualify for a $4,000 credit, down from the $7,500 new vehicle incentive but still substantial. The income caps tightened though. Single filers earning over $55,000 and married couples exceeding $110,000 lose eligibility entirely. Vehicle price caps also apply, limiting the credit to models priced below $25,000.
Home office deductions face renewed scrutiny. The simplified option allows $5 per square foot, unchanged from prior years, but the IRS expects to audit more home business claims following pandemic-era expansions. Keeping detailed records of business use becomes essential.
Charitable giving rules remain favorable for high-income earners. The charitable contribution deduction ceiling stays at 60% of adjusted gross income for cash donations to public charities. Bunching donations across years still saves taxes for those above standard deduction thresholds.
Energy-efficient home improvements qualify for a 30% tax credit through 2032, covering solar installations, heat pumps, and insulation upgrades. Unlike deductions, credits directly reduce tax liability dollar-for-dollar, making them more valuable.
Cryptocurrency reporting has tightened. The IRS expects brokers to report digital asset transactions on Form 1099-DA, affecting capital gains tracking. Anyone who mined crypto or received it as payment owes tax on the fair market value at receipt