The IRS makes changes to the tax code every year. Jon Fiorelli, president of Be Prepared Tax Service, shares some of these new adjustments.
The standard deductions have increased for 2023 and will do so again in 2024. “Those amounts are going to go up even more, which is a good thing,” says Jon. “The government is finally indexing these deductions for inflation, which they haven't done for many years. These numbers were static.” Jon believes this to be a nice change of pace because the cost of living has been rising significantly, noting that the gift tax annual exclusion also increased to $18,000 for 2024.
Another change is Secure Act 2.0, which mainly deals with retirement income and retirement accounts. “The required minimum distribution is a requirement that the IRS put in place that says if you have a retirement account, you must distribute income out of that retirement account starting at a given age,” explains Jon. That given age has increased from 70 and a half to 73.
The mileage deduction rate for business purposes increased to 65.5 cents per mile. Jon suggests getting an app to help keep track because it’s easier to assist in getting your taxes in order. “What's really nice about these apps is they print out a nice, what we call an accountless copy, which gives me the totals, which is all I need at the end of the year,” says Jon.
“You need to keep in your files detailed data in case of an audit. This is a hot topic by the IRS, by the way, they know that a lot of people take advantage of the mileage because it's a very nice deduction,” says Jon.
With tax laws changing constantly, Jon believes that turning to a professional is the way to go. “I know there's the do-it-yourselfers out there with Turbo Tax and things like that. If you have any professional, it's going to be better than doing it yourself.”
It literally pays to hire an expert.
