The 2024 tax season introduces several changes that reshape deductions and credits for individual filers, particularly affecting e-commerce sellers and electric vehicle buyers.
The IRS has tightened reporting requirements for online sellers using platforms like Amazon, eBay, and Etsy. Third-party payment networks now must report gross transaction volumes to the IRS starting this year, lowering the reporting threshold from $20,000 to $5,000. This expansion forces more sellers to document income carefully, though legitimate business expenses remain deductible. Sellers should track inventory costs, platform fees, shipping expenses, and equipment purchases to offset reported gross income.
Electric vehicle buyers face a restructured tax credit landscape. The federal EV tax credit of up to $7,500 remains available, but eligibility rules tightened significantly. The credit now applies at the point of sale for qualifying vehicles, allowing buyers to claim the benefit directly rather than waiting until tax filing. Vehicle assembly location requirements narrowed further, and income thresholds for buyers tightened. New vehicles must meet domestic content rules, while used EV buyers face stricter mileage and price caps. The credit phases out for new vehicles priced above $55,000 for sedans and $80,000 for vans and trucks.
Standard deduction amounts increased modestly. Single filers receive a $14,600 standard deduction, up from $13,850, while married couples filing jointly now claim $29,200, up from $27,700. Retirees age 65 and older receive additional deduction increases.
Child tax credit parameters remain largely unchanged at $2,000 per qualifying child. However, some families may qualify for advance payments if their income shifted downward from the previous year.
Charitable contribution rules continue unchanged, but bunching donations into alternating years remains a strategy for high-income filers to exceed the standard deduction threshold and claim itemized deductions.
For gig workers and independent contractors, the Section 179 expensing limit increased to $1,220,000, allowing accelerated depreciation on business equipment purchases. Home office deductions expanded slightly for self-employed individuals using dedicated workspace.
Tax-loss harvesting strategies remain useful for investors managing capital gains from 2024 market activity. Investors should review portfolio performance and offset gains with realized losses before December 31.