Tax information for 2024 returns (2025 tax season)

There aren't dramatic changes affecting most 2024 federal 1040 tax returns. My checklist provides you a quick easy way to identify items that apply to your situation. 

The vast majority of taxpayers now use the standard deduction. $14,600 Single, $21,900 Head of Household (must have a qualifying child or parent), $29,200 Married Filing Joint. Itemized deductions consist of mortgage interest paid, charitable contributions, and taxes paid (limited to $10,000) to state for income tax and county for real estate tax. You do not need to track amount paid for car tabs. Almost no one itemizes anymore.

Student Loan Interest, Tuition and books paid for college, HSA contributions, Health Insurance premiums paid out of pocket or through the MN SURE exchange, IRA contributions, Energy tax credits, and daycare costs. Teachers can deduct up to $300 for out of pocket supply costs. National Guard members who travel more than 100 miles to base can deduct their mileage.

The Child Tax Credit (under 17) is $2,000 for 2024. The credit for other dependents is $500. Certain folks (other than children of course) may qualify you for a higher standard deduction, typically parents living in your home that you pay for. Ask for more info if unsure of what you qualify for.

Contribution limits for 2024 have been increased. Substantial contributions are possible into your 401K, 403B, 457 etc. The 2024 IRA contribution max is $7,000. Taxpayers 50+ can add an additional $1,000. IRA contributions may be limited based on the amount of earned income and/or the adjusted gross income shown on your tax return. The Traditional IRA and ROTH IRA each have different rules...the contribution limit applies to the combined total of contributions to both types of IRAs.

No major changes. If your health insurance premiums are deducted from your paycheck on a pre-tax basis (most employees), you don't need to report them on your tax return. If you buy health insurance through the private market or public exchange, be sure to let me know how much you paid and get me a copy of your 1095-A if you buy through MNSURE or another exchange.

Effective with the 2023 tax year and continuing with the 2024 tax year, most taxpayers with income below $105,380 (MFJ) $82,190 (Single) will not have to pay any MN income tax on their social security benefits. Some taxpayers pay federal tax on a portion of their social security benefits when their income is above a threshold ($32,000 MJF) or ($25,000 S).

Renters need to obtain their CRP (Certificate of Rent Paid) from their landlord before filing their 2024 MN income tax return. The MN Rent Credit is now calculated and included with the M1 (Individual Income Tax Return). Renters no longer file an M1PR (MN Property Tax Return) and no longer get a refund in August.

The MN dependent exemption is $5,050 for 2024. This amount is subtracted from your gross income in calculating the amount of your income subject to MN income tax. 

Starting in mid-2025, taxpayers who qualify for the MN child tax credit ($1,750 for each dependent child under age 18) can "opt in" to receive a portion of their 2025 anticipated child tax credit IN ADVANCE. Advance payments will be based on 1/2 of the expected credit amount and will be paid out in 3 installments in July, Sept, and Nov of 2025.

The additional child and dependent care credit has been increased.

The subtraction for contributions to a Wisconsin state sponsored college savings account has been increased to a maximum of $5,000 per beneficiary.

The subtraction for tuition and fees has been increased to a maximum of $7,333 per student...subject to phase out at higher incomes.

Wisconsin tax law differs substantially from Federal law. We will make appropriate adjustments on your Wisconsin return.

This is a very brief overview of some federal and state tax changes. Each client's situation will be carefully reviewed and each client will be notified of other changes that potentially impact their tax situation. If YOU have changes from the previous year, be sure to let me know!