1. Increased Standard Deduction

• The standard deduction for all filing statuses has been increased to account for inflation.

  • Single Filers: $14,600

  • Married Filing Jointly: $29,200

  • Head of Household: $21,900

• Impact: Fewer taxpayers may need to itemize, simplifying the filing process.

2. Expanded Child Tax Credit

• The Child Tax Credit has been temporarily increased to $3,600 per child under six and $3,000 for children aged six to seventeen.

• Impact: Families with dependents may receive larger refunds or owe less in taxes.

3. Energy-Efficient Home Credits

• Taxpayers who invest in energy-efficient home improvements (solar panels, energy-efficient windows, HVAC systems) can qualify for expanded credits.

• Impact: This incentivizes sustainable home upgrades while reducing tax liabilities.

4. Retirement Contribution Adjustments

• Contribution limits for 401(k) and IRA accounts have been increased:

  • 401(k): Up to $23,000 (with an additional $7,500 catch-up for those 50+)

  • IRA: $7,000 (with a $1,000 catch-up contribution for those 50+)

• Impact: Taxpayers can reduce their taxable income by contributing more to retirement accounts.

5. Small Business Deductions

• The Section 179 deduction limit for business equipment and assets has been raised to $1.2 million.

• Impact: Small businesses can write off larger equipment purchases, improving cash flow and reducing taxable income.

6. Reporting Requirements for Digital Payments

• Third-party payment platforms (PayPal, Venmo) must report business transactions exceeding $600 to the IRS.

• Impact: Freelancers and gig workers must ensure they track income from digital payment platforms.

7. Health Savings Account (HSA) Limit Increase

• Contribution limits for HSAs have been raised:

  • Individual Coverage: $4,150

  • Family Coverage: $8,300

• Impact: Higher limits allow taxpayers to set aside more pre-tax dollars for medical expenses.