August 2, 2024 • 36 mins
In this episode of The Pink Money Podcast, host Jerry Williams breaks down the IRS’s most recent changes to the tax code — more than 60 adjustments that could affect your 2024 filing. From higher standard deductions and updated tax brackets to shifts in IRA contribution limits, AMT thresholds, and tax credits, Jerry explains what really matters in plain English. He also covers healthcare FSAs/HSAs, education credits like the American Opportunity and Lifetime Learning Credits, and how income levels affect deductions. Whether you file on your own or work with a professional, knowing these updates helps you avoid mistakes, maximize your benefits, and reduce tax-time stress.
Keywords/Tags: 2024 taxes, IRS updates, standard deduction, tax credits, IRA limits, Social Security, earned income credit, personal finance
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Episode Transcript
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SPEAKER_00 (00:01):
The best things in life are free But you can give
(00:27):
them to
SPEAKER_01 (00:32):
Welcome to the Pink Funding Podcast.
I'm your host, Jerry Williams.
And this is a podcast where wetalk about all things related to
money from a gay perspective.
And today I'm going to talkabout some of the more recent
changes that the IRS made to thetax code.
These are tax changes that wereput into effect at the end of
last year.
There were more than 60different ones that go into
effect, and they're really goingto affect you in the year 2024
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when you file your taxes.
So I'm going to go ahead andjump right in and let's talk
about some of the more pertinentthings that I think are going to
affect most people.
So one thing straight off islike the standard deduction.
Standard deduction is reallywhat most people take when
they're filing their taxes.
Either you take the standarddeduction or you're going to
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itemize your taxes, and thatreally just depends really up to
you.
So if you take the standarddeduction, you just deduct a
flat dollar amount.
It requires a lot less effortthan when you itemize, and a
deduction just reduces yourtaxable income, and it could
save you sometimes more thanwhat you would get by itemizing.
And it depends on how manythings that you itemize.
But if you do itemize, then youcan report each qualified
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deduction.
It does require that youcomplete a Schedule A and maybe
some other forms.
The deductions reduce yourtaxable income as well.
And on...
The other hand, it could alsosave you more money than when
you take the standard deduction.
It's really hard to say which isgoing to benefit you just by
saying I'm going to take this orI'm going to do that.
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You really have to sort of workout both.
So it might cost you some moneyif you're having someone else do
it for you, or you could just doit yourself.
So if you do itemize, you cantake things like your mortgage
interest, you could takecharitable deductions, you can
deduct your state and localtaxes up to like$10,000.
You can take unreimbursedmedical expenses, which is over
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as long as it's over seven and ahalf percent of your adjusted
gross income.
Those are just a few of thethings that you could take.
And it just requires that youhave your I's dotted and your
T's crossed.
Because if you get audited, theIRS is going to want to know
that you have the documentationto support these deductions that
you're trying to take.
Now, if you have someone who'sdoing your taxes for you, they
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are going to ask you a lot ofquestions about these deductions
that you're claiming to becausethey have penalties that...
they would face if they submitan inaccurate or incorrect
return.
So they can face up to a$600penalty against the preparer for
each failure to meet their duediligent requirements.
And that's for things like theearned income credit, or the
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American Opportunity Credit, orthe child tax credit, or the
other dependent credit, or evenwhen you file a head of
household.
So they will ask you a ask verypertinent, relevant questions
that really dig and get to themeat of what they're looking
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for.
And not only are they lookingfor it, they're putting this
information on paper andsubmitting it to the IRS.
The IRS is going to want toknow, is this an accurate and
correct return?
Okay, because any preparer, paidpreparer, they have to go
through training, education, andget certified to be a preparer.
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And That way the IRS knows thatthis person who's doing returns
for other people really knowswhat they're doing and isn't
just some local yokel on thecorner who's taking money from
people and really doesn't knowwhat they're doing.
And same thing for you.
You've got to submit the mostaccurate return possible.
If you want to itemize andyou're trying to claim this
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stuff, you need to have therecords so if you get audited,
you can prove to the IRS thatthese are legitimate deductions
that you're taking and you havethe proof behind it.
If you don't, your return couldbe rejected and you could pay
penalties as well.
Something you don't want toreally put yourself in that
situation.
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So beyond that, most people aregoing to take, like I said, the
standard deduction if they wantthe simplest and easiest way to
file their taxes.
If you're a married couple offiles joint for 2024, there's a
$1,500 increase on your standarddeduction from last year, which
means it's going to be$29,200.
If you're a single taxpayer oryou file married filing
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separately, then the standarddeduction increases by$750 to
$14,600.
If you're filing head ofhousehold, the standard
deduction will be$21,900, andthat's an$1,100 increase from
2023.
The depends as well on how oldyou are which means that if you
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are 65 or older or maybe blindthen you can also take a higher
standard deduction as well andthat really just depends on your
age meaning on the last day ofthe year that determines the age
that you are and so you get ahigher standard deduction if
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that is relevant to you so thoseStandard deductions, they kind
of change every so often.
Sometimes they change everyyear.
Sometimes they don't.
It just really depends.
So whether you're filing that1040, which is most people will
file, but if you're a senior,then you file the 1040 SR.
And they're similar, but thereare changes.
I mean, one of the chiefdifferences is the SR has bigger
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type.
So that's helpful, right?
As you get older and sometimesit's more difficult to see
things.
But anyway, the marginal taxrates are also the things that
change often.
And the marginal tax rate,that's the amount of tax that
applies to each additional levelof income.
We have what's called aprogressive tax system.
And that just means you pay morein taxes as your income rises,
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but you don't pay taxes on theentire amount in that tax
bracket.
Although people will often saythat, you know, I'm in the 22%
tax bracket.
So that may or may not beaccurate.
It really just depends becauseright now there are seven
different tax brackets.
There's the 10%, the 12, 22, 24,32, 35, and 37.
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And those are the exact sameones that there were last year.
But let's just say, I think theIRS uses a$50,000 example.
So let's just say if you're,making i'll just use this one
forty five thousand dollars soif you are single and you have
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forty five thousand dollars oftaxable income you pay ten
percent on the first eleventhousand and then twelve percent
on the income that falls betweeneleven thousand and one to forty
four seven twenty five and theremainder two hundred seventy
five falls into the twenty twopercent tax bracket so although
Again, not everything falls intothat tax, that 22% tax bracket.
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It just means that part of itwill.
So the, again, saying thatyou're in the 22% tax bracket is
sort of right, but it's notcompletely right because you
don't pay 22% on your entireincome.
So you only pay that on part.
Now, if you're trying to figureout, again, what your effective
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tax is or your average tax, nowthat is a little bit different
because then you are trulytalking about what is the
average tax that you pay.
So the average tax or theeffective tax rate is just going
to be the amount that you payoverall.
And there's a pretty simple wayto calculate it.
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You just take your total incomeand you divide it by the amount
of tax that you pay, and thenthat's going to be your
effective tax rate.
Pretty simple, straightforward,right?
And it just...
may be helpful to you if you'retrying to, like, for example,
get a loan or something.
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They may ask you what your taxbracket, or what tax bracket
you're in.
But it's just helpful for you toknow as well.
But maybe not.
Maybe you don't really need it,but at least you know how it's
calculated.
And I think the other thingthat's relevant to this is the
actual tax brackets, meaning the10% goes from 0% to 11%.
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12% goes from$11,601 to$47,150.
The 22% tax bracket goes from$47,151 to$10525.
And then the 24% goes from$10526to$191,950.
The 32% goes from$191,951 to$243,725.
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35% goes from 243,726 to609,350, and 37% goes to 609,351
and greater.
So I don't know that that'scommon knowledge to everyone,
but I think that it's relative,especially when you don't know
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how it works and now you have abetter idea of how it works.
So knowledge is power, right?
Anyway...
This doesn't really apply toyour state.
States have different ways ofcalculating your tax.
Some states like Colorado have aflat tax.
I think it's like a little over4%.
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Some states like Wyoming, Texas,Florida, there are no state
taxes.
So it's really...
It's really hard to say exactlyhow your state is going to tax
it, but, of course, somethingthat you want to find out, and,
of course, you're going to knowwhen you pay your taxes.
Anyhow.
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The next thing I think that'srelevant beyond the standard
deduction and the marginal taxbrackets is the alternative
minimum tax.
Now, what that means is it's aparallel tax system that's
designed to make sure thathigh-income individuals,
corporations, estates, trusts,they pay a minimum amount tax,
even if they have deductions,credits, and other tax benefits
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that reduce their taxliabilities substantially.
So when they fall into the AMT,there's two different tax rates,
$26 And when they fall into thisAMT system, then what that means
is some of the things that theytypically can take a tax
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deduction for will get addedback in.
And not everybody knows that.
It used to be a lot more commonbecause it didn't get adjusted
for inflation, but it has gottenadjusted as time is marching on.
marched on.
And that's great because itshould be.
And what I mean by that is ifsome things like state and local
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taxes or home mortgage interestdeductions, especially if it's
not used to buy, build, orimprove your home, or if there's
a lot of miscellaneous itemizeddeductions or depreciation on
certain property or evenincentive stock options, all
those can trigger AMT.
And your taxes are just going tobe more challenging to complete
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if you fall into the AMT taxsystem, and you're probably
going to pay a little bit more.
But that really just depends.
For example, it depends on yourfiling status, but for, I
believe it's 2024, thealternative minimum tax for
single taxpayers is$85,700 andbegins to phase out at$609,350.
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And for married filing jointly,it's$133,300 and phases out at
$1,218,700.
So if you fall within thatrange, it's quite likely that
you might fall into the AMT.
But it all depends.
So jumping on from that, for the2024 tax year, the Earned Income
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Tax Credit, the EITC, Thatamount is$7,830 for qualifying
taxpayers who have three or morequalifying children.
That's an increase of$7,430 from2023.
And there's a tax table thatgives you some more clarity on
how this works and what thephase outs are.
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And what I mean by that is youwant to Take the full amount
that's due to you, but you don'twant to take more than what you
can take because there are fulldeductions and partial, and then
there's some that's none.
So you just want to fall withinthat range.
And again, the IRS is going tomake sure that if you're
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claiming a qualified child, thatthat child is actually
qualified.
And there's a lot of differentrules you really want to make
sure that you follow so youdon't get in trouble for that.
So the other thing that'srelevant is when you're trying
to take a deduction for yourIRA.
So if you're taking a deductionfor your IRA, that's similarly
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where you may be able to take afull tax deduction or no tax
deduction.
And it really depends on yourincome and whether or not you're
covered by an employer-sponsoredplan.
So for 2024, for example, ifyou're single...
and you or your spouse arecovered by an employer
retirement plan like a 401k,then your income, you can take a
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full IRA deduction if yourincome is$77,000 or less if
you're single.
If you're married filingjointly, it's$123,000 or less.
There's a partial deduction ifyour income falls and you're
single between$77,000 and$87,000.
If you're married filingjointly, then if your income is
more than$123,000 but it's lessthan$143,000, you can only take
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a partial tax deduction.
And if your income and you'resingle, it's over$87,000, then
it's called a non-deductiblecontribution.
Similarly, if you're marriedfiling jointly, it's above
$143,000, it's non-deductible aswell.
So, Roth...
contributions are notdeductible, period, right?
Because you're putting after-taxmoney into your IRA.
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We're really talking about inthe traditional IRAs where you
put in after-tax money thatcomes from your checking
account, but once it goes intothe IRA, then when you take a
full tax deduction or even apartial tax deduction, then
that's what really turns it intopre-tax money.
So ultimately, when it comes outof your IRA later on in
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retirement, you don't pay taxeson money that's been taxed
before.
you only pay taxes on moneythat's never been taxed before.
And that includes the earningsand the contributions.
Now, if it's a non-deductiblecontribution or partial, then
you use Form 8606 to track thesenon-deductible contributions.
And it can be kind of tricky,you know, as time marches on,
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because we're talking aboutyears upon years upon years of
making contributions to yourIRA.
And then you've been takingthese contributions deductions,
maybe some partial, maybe no.
And then there's a little bit ofa formula that goes into, that's
put into place when you starttaking your tax deductions that
calculates on every withdrawalthat you make how much is
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actually going to be taxable.
So similarly, if you and yourspouse are not covered by an
employer-sponsored plan like a401k and you're single or
married, then It doesn't matterwhat your income is.
If you're single or marriedfiling jointly, you can take a
full tax deduction.
And if you're married filingjointly but one spouse is
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covered, then if your income is$230 or less, you can take a
full tax deduction.
If you're single, there's nopartial or non-deductible, but
there is if you're marriedfiling jointly and one spouse is
covered.
So again, full tax deduction ifyour income is$230,000 or less.
If it's more than$230,000 butless than$240,000, there's only
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a partial tax deduction.
And if your income is above$240,000, you can still make a
contribution, but it'snon-deductible.
You cannot take a tax deductionin that case.
So...
That's just IRS rules.
Maybe that'll change someday,but that's the way it is today.
So speaking of that, for 2024,you can make a$7,000
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contribution to your IRA.
And if you're 50 or older, youcan take an additional$1,000.
And if you are...
50 or over, and you have a 401k,403b, 457, or a SARSEP plan,
then your annual contribution is$23,000.
If you're 50 or over, you canadd an additional$7,500.
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If you have a simple IRA plan,then your annual contribution
will be$16,000.
If you're 50 or over, you canadd an additional$3,500.
So all of those are basically$500 changes from the prior
year.
If you have a Roth IRA,similarly, your annual
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contribution is$7,000.
If you're 50 or over, you have a$1,000 catch-up.
However, when you do want tocontribute to a Roth IRA, there
are eligibility requirements.
levels for contributions, whichmeans if you're single or head
of household, your income, if itfalls between 146,000 or 161,
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then you are only gonna be ableto make a partial contribution.
If it goes above that, nocontribution.
Same thing with married filingjointly.
If your income is between$230,000 and$240,000, then
you're going to be able to makea partial.
If it goes above$240,000, nocontribution to your Roth IRA.
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If you're married filingseparately, then the range is
from$0 to$10,000.
So if your income falls withinthat range, yes, you can make a
contribution to the Roth.
If it goes above$10,000, nocontribution.
Then you move to the traditionaland make your contribution that
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way.
You can go to the IRS if youwant to see a table or learn
more.
I'll probably do another IRApodcast and talk a little bit
more about how that works.
But it just really right now isjust for your FYI, really.
So...
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There are different compensationplans as well that have changed,
and some of those aresignificant, relevant, and
salient to your individual taxsituation.
It really just depends.
The other thing that's relevant,I think, to most people, and it
really just depends on thehealth care plan that you have.
So there are health savingsaccounts and flexible savings
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accounts.
And there are dollar limitationsfor employee salary reductions
and contributions to flexiblehealth saving accounts.
They have increased by$3,200.
And for cafeteria plans thatpermit carryovers of unused
amounts, the maximum carryoveramount is$640, and that's a$30
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increase from last year.
So for flexible savingsaccounts, these are special
accounts that you put money intoand you use it to pay for
certain out-of-pocket healthcare costs.
So you contribute pre-tax moneythrough your payroll deduction,
and that reduces your taxableincome.
The funds that go into yourflexible savings account are
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used within the year, and someof them have a grace period
that, like I said, will allowfor carryover of a certain
amount of money.
Like I said, this year it'sgoing to be$640 from the prior
year.
But you can use it to pay forcertain medical costs, dental
and vision expenses that are notcovered by insurance.
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Also things like co-pays, somedeductibles, prescription
medications.
maybe even some over-the-counteritems.
I'm not an expert in these, butthose are just some general
rules.
There are really two types offlexible savings accounts.
There's the health care flexiblespending account that, like I
said, covers medical, dental,vision expenses for you, your
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spouse, and your dependents.
And there's also a dependentcare flexible savings account.
And like the name suggests, itcovers eligible expenses that
are related to the care ofdependents while you're at work,
like daycare, after schoolprograms, even elder care.
But for 2024, the contributionlimits for an FSA are$3,050 per
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year for the health careflexible spending account,$5,000
per year for single or marriedfiling jointly, and$2,500 per
year for married filingseparately.
Again, the benefits really arethat you put pre-tax money in,
it reduces your taxable income,and it saves you money on your
federal, state, and socialsecurity taxes.
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So the full amount that youelect to contribute in your
healthcare FSA is availablereally for use at the beginning
of the year.
Even though your contributionsare made throughout the year,
you can use that moneythroughout the year.
And again, anything that'sreally not covered by your
health insurance plans.
But the downside to a flexiblespending account is they have a
use it or lose it rule.
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And that means Any funds thatare not used by the end of the
year are forfeited.
You lose them.
Some plans, like I said, willallow a small carryover amount,
but some even allow a smallgrace period of maybe two and a
half months to use what's leftover.
That's not...
set in stone rule just dependson the plan.
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For dependent care, you know,they have even stricter rules
and lower contribution limitsthan the health care FSAs.
But, you know, a lot of peopleuse them.
I knew plenty of people who, youknow, calculated how much they
were going to pay in child carefor the year, and that's how
much money would go into theirFSA.
So it's helpful.
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That's what I'm really trying tosay.
But if you have a self-onlycoverage, maybe in a medical
savings account, then that planwill have an annual deductible
that's not less than$2,800.
That's a$150 increase from theprior year, but not more than
$4,150, which is an increase of$200 from 2023.
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So these are, again, plans thatare a tax advantage to help you.
They are tax advantage savingsaccounts that are designed to
help you save for future medicalexpenses.
And there are two types of theseas well.
There are the Archer MSA and theMedicare FSA.
So the Archer is a personalsavings account for medical
expenses.
It's really only available toself-employed people or
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employees of small businesses.
And the Medicare FSAs aresimilar to the health savings
account, but they'respecifically for people who are
enrolled in high-deductibleMedicare Advantage plans, which
is also known as Medicare PartC.
Again, a whole different ball ofwax, but if it falls into your
realm, it's something to beaware of.
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So contributions to an ArcherMSA can only be made by the
account holder or the employer,but not both in the same year.
Medicare MSA, the contributionsare made by Medicare, but not by
the account holder.
Contributions are made withpre-tax dollars.
It reduces your taxable income,but your earnings will grow
tax-free.
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Very similar to like a Roth IRAor even your traditional IRA.
I should have just said IRA,period.
But The funds, again, for anymedical expenses, including
doctor visits, hospital stays,prescription drugs, and really a
lot of other out-of-pockethealth care expenses.
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These contributions to an MSAare set annually.
An Archer MSA, it's typically apercentage of your health care
plan deductible.
The MSA funds remain within thecount holder.
with the account holder, even ifyou change jobs or healthcare
plans.
The HSAs are really differentfrom the MSAs, which are just
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more limited in terms of who canopen them.
And again, if you'reself-employed or in a small
business that offers one, it canbe very helpful to you, or
especially again, if you're in ahigh deductible healthcare plan.
So there is something foreveryone in that realm, if those
circumstances apply to you.
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So let's move on from that.
And another thing that'schanging in 2024 is the foreign
income tax.
earned exclusion, which is$126,500, which is an increase
from$120,000 for 2023.
Also changing is the estates fordecedents who die in 2024.
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They have an exclusion amount of$13,610,000.
That's above the$12,920 for lastyear.
So meaning if you have...
an estate that's above that,then estate taxes are going to
apply.
If you're below that, no estatetaxes will apply.
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There's also the annual gift taxexclusion that has gone up to
$18,000 from$17,000 last year.
Also, there is a change to theadoption tax credit for 2024.
It's gone up by a little bit.
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Let me restate that.
It has gone up to$16,810, whichis above the$15,950 for last
year.
So it's helpful.
Hey, if it's money and you'reable to get it, take it, right?
Also, some of the things thatdid not really change, their
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personal exemption for 2024remains at zero as it was for
2023.
That is an elimination of thepersonal exemption that was a
provision of the Tax Cuts andJobs Act.
and there's just really nothingmore to really say about that.
There is some other changes toyour plans if you're in a 401K
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or a 403B, meaning if you have aplan and you're allowed to take
advantage of it, certainly doso.
But for 2024, the limit is$23,000.
It's a$500 change from...
prior year.
If you're over 50, there's acatch-up contribution, which is
again a$500 increase to$8,000now.
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As I mentioned, the traditionalor Roth IRA contribution has
gone up by$500 to$7,000, as wellas the catch-up contribution for
over 50 has gone up by$500 to$8,000.
Just to reiterate, The healthsavings account, if you're
single, has gone up by$300 to$4,150.
And the health savings accountfor family has gone up by$600 to
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$8,300.
So all of those are relevantchanges.
There are some other ones that Iwant to go over briefly.
I'm going to try to, I knowwe're already about a half an
hour, and I know that this isprobably getting a little
confusing because there's a lotto it.
I might have to do round two,but I'm going to go through some
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of these just real quickly andsee how far I can get for you.
But as I mentioned, the gift taxhas gone up to$18,000.
The estate tax has increased aswell to$13.6 million.
as well as the earned income taxcredit.
That's a refundable tax creditthat's for low, moderate income
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workers.
So you'll see a bump in 2024.
This credit really depends onthe income and the number of
children, but people withoutkids can also qualify.
So you really want to takeadvantage of that if you can.
And in 2024, the credit will goup to$7,830 for taxpayers with
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three or more children.
Also, there's the OpportunityTax Credit.
The American Opportunity TaxCredit is a federal tax credit
that allows you to lower yourtax bill by up to$2,500 if you
paid that much in undergraduateeducation expenses last year.
You can claim all of the first$2,000.
that you spend on eligibleeducation expenses like tuition,
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school fees, books, andsupplies, plus 25% of the next
$2,000 for a total of$2,500.
So you cannot claim livingexpenses or transportation
costs, but tuition and fees,books, supplies are probably
going to be the lion's share ofit anyway.
So the American Opportunity TaxCredit is really for
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undergraduate college studentsonly.
You have to be pursuing it.
degree or other recognizededucational credential you have
to be enrolled at least halftime or at least one for one for
at least one academic periodbeginning in the tax year you
and have not finished the firstfour years of your education by
the beginning of the tax yearand you have not claimed the
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American opportunity tax creditfor more than four years and you
do not have a felony drugconviction by the end of the
year So you can claim the crediton your taxes if you're a
student for a maximum of fouryears as long as no one else
like your parents claims you asa dependent.
If so, your dependents willclaim the credit instead of you.
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But if you're a student and youpaid for your educational
expenses, you just have to belisted on your return and not be
dependent on anyone else'sreturn.
Hopefully that makes sense.
So there's some, for that, thereare some modified adjusted gross
income ranges Just go throughone.
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For example, if you're single,it's$80,000 or less.
Married filing jointly, it's$160,000 or less.
And that will give you the fullcredit.
If you're single and your incomeis more than$80,000 but less
than$90,000, you only get apartial credit.
If you're married filing jointlyand your income is more than
$160,000 but less than$180,000,only partial.
If you're a single filer, yourincome is$90,000 or more,
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there's no credit.
If you're married filingjointly, your income is more
than$180,000, also no credit.
So the American Opportunity TaxCredit, what it does is it
really lowers the amount oftaxes you pay.
If you owe$3,000, for example,in taxes and you get the full
$2,500 credit, then you onlyhave to pay$500 to the IRS.
(31:41):
Is this a refundable credit?
Yes.
That means you can still receive40% of the American Opportunity
Tax Credit value up to$1,000,even if you earned no income
last year or you owe no tax.
For example, if you qualifiedfor the refund, the credit could
increase the amount you'dreceive by up to$1,000.
And that's why the AmericanOpportunity Tax Credit, it's
(32:02):
usually the best education taxbreak for students and your
families.
There's also the LifetimeLearning Credit.
The Lifetime Learning Credit isa federal tax credit that can
reduce your taxable income by upto$2,000 if you're pursuing an
undergraduate, graduate, orvocational even, a vocational or
even a non-degree program.
So unlike the AmericanOpportunity Tax Credit, there's
(32:23):
no limit to the number of taxyears in which you can claim the
credit.
The way this works is you canclaim 20% of the first$10,000
you paid towards your tuitionand fees for a maximum of$2,000.
These for things like coresupplies, living expenses,
transportation costs that arenot covered are qualified
expenses for the LifetimeLearning Credit.
(32:44):
The Lifetime Learning Credit isreally, it's ideal for graduate
students or anyone else takingclasses to build your new...
to develop new skills, even ifyou already claim the American
Opportunity Tax Credit on yourtaxes in the past.
So any of these things, youreally want to seek some
competent tax advice or read upon the IRS and just follow the
(33:04):
rules.
So again, you don't get introuble by it.
Some of these things I'll try tocover in a little bit greater
detail in future podcasts aswell.
But again, students can claimthe lifetime earning credit for
themselves if you file your owntaxes, or if your parents are
claiming you as a dependent,they can also claim To claim the
lifetime earning credit, thecriteria is you have to be
(33:24):
enrolled or taking courses at aneligible educational
institution, be taking highereducation courses to get a
degree or another recognizededucation credential or to
improve your job skills, and beenrolled for at least one
academic period beginning at thetax year.
So again, other informationregarding the income ranges you
(33:47):
want to take a look at.
on the IRS website.
I think that's where I'm goingto stop right now because I know
it's a firehose of informationand there's a lot in there.
I'm going to try to go over moreinformation as we go forward.
I think the more you know, thebetter you're going to be always
because knowledge is power.
(34:09):
That's pretty much it for metoday.
And other than that, I hope youhave a great day and I will talk
to you next time.
The best things in life are free But you can give
(00:27):
them to
SPEAKER_01 (00:32):
Welcome to the Pink Funding Podcast.
I'm your host, Jerry Williams.
And this is a podcast where wetalk about all things related to
money from a gay perspective.
And today I'm going to talkabout some of the more recent
changes that the IRS made to thetax code.
These are tax changes that wereput into effect at the end of
last year.
There were more than 60different ones that go into
effect, and they're really goingto affect you in the year 2024
(00:54):
when you file your taxes.
So I'm going to go ahead andjump right in and let's talk
about some of the more pertinentthings that I think are going to
affect most people.
So one thing straight off islike the standard deduction.
Standard deduction is reallywhat most people take when
they're filing their taxes.
Either you take the standarddeduction or you're going to
(01:15):
itemize your taxes, and thatreally just depends really up to
you.
So if you take the standarddeduction, you just deduct a
flat dollar amount.
It requires a lot less effortthan when you itemize, and a
deduction just reduces yourtaxable income, and it could
save you sometimes more thanwhat you would get by itemizing.
And it depends on how manythings that you itemize.
But if you do itemize, then youcan report each qualified
(01:38):
deduction.
It does require that youcomplete a Schedule A and maybe
some other forms.
The deductions reduce yourtaxable income as well.
And on...
The other hand, it could alsosave you more money than when
you take the standard deduction.
It's really hard to say which isgoing to benefit you just by
saying I'm going to take this orI'm going to do that.
(01:59):
You really have to sort of workout both.
So it might cost you some moneyif you're having someone else do
it for you, or you could just doit yourself.
So if you do itemize, you cantake things like your mortgage
interest, you could takecharitable deductions, you can
deduct your state and localtaxes up to like$10,000.
You can take unreimbursedmedical expenses, which is over
(02:20):
as long as it's over seven and ahalf percent of your adjusted
gross income.
Those are just a few of thethings that you could take.
And it just requires that youhave your I's dotted and your
T's crossed.
Because if you get audited, theIRS is going to want to know
that you have the documentationto support these deductions that
you're trying to take.
Now, if you have someone who'sdoing your taxes for you, they
(02:44):
are going to ask you a lot ofquestions about these deductions
that you're claiming to becausethey have penalties that...
they would face if they submitan inaccurate or incorrect
return.
So they can face up to a$600penalty against the preparer for
each failure to meet their duediligent requirements.
And that's for things like theearned income credit, or the
(03:08):
American Opportunity Credit, orthe child tax credit, or the
other dependent credit, or evenwhen you file a head of
household.
So they will ask you a ask verypertinent, relevant questions
that really dig and get to themeat of what they're looking
(03:29):
for.
And not only are they lookingfor it, they're putting this
information on paper andsubmitting it to the IRS.
The IRS is going to want toknow, is this an accurate and
correct return?
Okay, because any preparer, paidpreparer, they have to go
through training, education, andget certified to be a preparer.
(03:49):
And That way the IRS knows thatthis person who's doing returns
for other people really knowswhat they're doing and isn't
just some local yokel on thecorner who's taking money from
people and really doesn't knowwhat they're doing.
And same thing for you.
You've got to submit the mostaccurate return possible.
If you want to itemize andyou're trying to claim this
(04:10):
stuff, you need to have therecords so if you get audited,
you can prove to the IRS thatthese are legitimate deductions
that you're taking and you havethe proof behind it.
If you don't, your return couldbe rejected and you could pay
penalties as well.
Something you don't want toreally put yourself in that
situation.
(04:30):
So beyond that, most people aregoing to take, like I said, the
standard deduction if they wantthe simplest and easiest way to
file their taxes.
If you're a married couple offiles joint for 2024, there's a
$1,500 increase on your standarddeduction from last year, which
means it's going to be$29,200.
If you're a single taxpayer oryou file married filing
(04:53):
separately, then the standarddeduction increases by$750 to
$14,600.
If you're filing head ofhousehold, the standard
deduction will be$21,900, andthat's an$1,100 increase from
2023.
The depends as well on how oldyou are which means that if you
(05:15):
are 65 or older or maybe blindthen you can also take a higher
standard deduction as well andthat really just depends on your
age meaning on the last day ofthe year that determines the age
that you are and so you get ahigher standard deduction if
(05:36):
that is relevant to you so thoseStandard deductions, they kind
of change every so often.
Sometimes they change everyyear.
Sometimes they don't.
It just really depends.
So whether you're filing that1040, which is most people will
file, but if you're a senior,then you file the 1040 SR.
And they're similar, but thereare changes.
I mean, one of the chiefdifferences is the SR has bigger
(06:01):
type.
So that's helpful, right?
As you get older and sometimesit's more difficult to see
things.
But anyway, the marginal taxrates are also the things that
change often.
And the marginal tax rate,that's the amount of tax that
applies to each additional levelof income.
We have what's called aprogressive tax system.
And that just means you pay morein taxes as your income rises,
(06:22):
but you don't pay taxes on theentire amount in that tax
bracket.
Although people will often saythat, you know, I'm in the 22%
tax bracket.
So that may or may not beaccurate.
It really just depends becauseright now there are seven
different tax brackets.
There's the 10%, the 12, 22, 24,32, 35, and 37.
(06:47):
And those are the exact sameones that there were last year.
But let's just say, I think theIRS uses a$50,000 example.
So let's just say if you're,making i'll just use this one
forty five thousand dollars soif you are single and you have
(07:07):
forty five thousand dollars oftaxable income you pay ten
percent on the first eleventhousand and then twelve percent
on the income that falls betweeneleven thousand and one to forty
four seven twenty five and theremainder two hundred seventy
five falls into the twenty twopercent tax bracket so although
Again, not everything falls intothat tax, that 22% tax bracket.
(07:31):
It just means that part of itwill.
So the, again, saying thatyou're in the 22% tax bracket is
sort of right, but it's notcompletely right because you
don't pay 22% on your entireincome.
So you only pay that on part.
Now, if you're trying to figureout, again, what your effective
(07:53):
tax is or your average tax, nowthat is a little bit different
because then you are trulytalking about what is the
average tax that you pay.
So the average tax or theeffective tax rate is just going
to be the amount that you payoverall.
And there's a pretty simple wayto calculate it.
(08:17):
You just take your total incomeand you divide it by the amount
of tax that you pay, and thenthat's going to be your
effective tax rate.
Pretty simple, straightforward,right?
And it just...
may be helpful to you if you'retrying to, like, for example,
get a loan or something.
(08:38):
They may ask you what your taxbracket, or what tax bracket
you're in.
But it's just helpful for you toknow as well.
But maybe not.
Maybe you don't really need it,but at least you know how it's
calculated.
And I think the other thingthat's relevant to this is the
actual tax brackets, meaning the10% goes from 0% to 11%.
(09:01):
12% goes from$11,601 to$47,150.
The 22% tax bracket goes from$47,151 to$10525.
And then the 24% goes from$10526to$191,950.
The 32% goes from$191,951 to$243,725.
(09:27):
35% goes from 243,726 to609,350, and 37% goes to 609,351
and greater.
So I don't know that that'scommon knowledge to everyone,
but I think that it's relative,especially when you don't know
(09:47):
how it works and now you have abetter idea of how it works.
So knowledge is power, right?
Anyway...
This doesn't really apply toyour state.
States have different ways ofcalculating your tax.
Some states like Colorado have aflat tax.
I think it's like a little over4%.
(10:07):
Some states like Wyoming, Texas,Florida, there are no state
taxes.
So it's really...
It's really hard to say exactlyhow your state is going to tax
it, but, of course, somethingthat you want to find out, and,
of course, you're going to knowwhen you pay your taxes.
Anyhow.
(10:28):
The next thing I think that'srelevant beyond the standard
deduction and the marginal taxbrackets is the alternative
minimum tax.
Now, what that means is it's aparallel tax system that's
designed to make sure thathigh-income individuals,
corporations, estates, trusts,they pay a minimum amount tax,
even if they have deductions,credits, and other tax benefits
(10:50):
that reduce their taxliabilities substantially.
So when they fall into the AMT,there's two different tax rates,
$26 And when they fall into thisAMT system, then what that means
is some of the things that theytypically can take a tax
(11:11):
deduction for will get addedback in.
And not everybody knows that.
It used to be a lot more commonbecause it didn't get adjusted
for inflation, but it has gottenadjusted as time is marching on.
marched on.
And that's great because itshould be.
And what I mean by that is ifsome things like state and local
(11:35):
taxes or home mortgage interestdeductions, especially if it's
not used to buy, build, orimprove your home, or if there's
a lot of miscellaneous itemizeddeductions or depreciation on
certain property or evenincentive stock options, all
those can trigger AMT.
And your taxes are just going tobe more challenging to complete
(11:56):
if you fall into the AMT taxsystem, and you're probably
going to pay a little bit more.
But that really just depends.
For example, it depends on yourfiling status, but for, I
believe it's 2024, thealternative minimum tax for
single taxpayers is$85,700 andbegins to phase out at$609,350.
(12:18):
And for married filing jointly,it's$133,300 and phases out at
$1,218,700.
So if you fall within thatrange, it's quite likely that
you might fall into the AMT.
But it all depends.
So jumping on from that, for the2024 tax year, the Earned Income
(12:43):
Tax Credit, the EITC, Thatamount is$7,830 for qualifying
taxpayers who have three or morequalifying children.
That's an increase of$7,430 from2023.
And there's a tax table thatgives you some more clarity on
how this works and what thephase outs are.
(13:04):
And what I mean by that is youwant to Take the full amount
that's due to you, but you don'twant to take more than what you
can take because there are fulldeductions and partial, and then
there's some that's none.
So you just want to fall withinthat range.
And again, the IRS is going tomake sure that if you're
(13:27):
claiming a qualified child, thatthat child is actually
qualified.
And there's a lot of differentrules you really want to make
sure that you follow so youdon't get in trouble for that.
So the other thing that'srelevant is when you're trying
to take a deduction for yourIRA.
So if you're taking a deductionfor your IRA, that's similarly
(13:49):
where you may be able to take afull tax deduction or no tax
deduction.
And it really depends on yourincome and whether or not you're
covered by an employer-sponsoredplan.
So for 2024, for example, ifyou're single...
and you or your spouse arecovered by an employer
retirement plan like a 401k,then your income, you can take a
(14:13):
full IRA deduction if yourincome is$77,000 or less if
you're single.
If you're married filingjointly, it's$123,000 or less.
There's a partial deduction ifyour income falls and you're
single between$77,000 and$87,000.
If you're married filingjointly, then if your income is
more than$123,000 but it's lessthan$143,000, you can only take
(14:37):
a partial tax deduction.
And if your income and you'resingle, it's over$87,000, then
it's called a non-deductiblecontribution.
Similarly, if you're marriedfiling jointly, it's above
$143,000, it's non-deductible aswell.
So, Roth...
contributions are notdeductible, period, right?
Because you're putting after-taxmoney into your IRA.
(14:58):
We're really talking about inthe traditional IRAs where you
put in after-tax money thatcomes from your checking
account, but once it goes intothe IRA, then when you take a
full tax deduction or even apartial tax deduction, then
that's what really turns it intopre-tax money.
So ultimately, when it comes outof your IRA later on in
(15:18):
retirement, you don't pay taxeson money that's been taxed
before.
you only pay taxes on moneythat's never been taxed before.
And that includes the earningsand the contributions.
Now, if it's a non-deductiblecontribution or partial, then
you use Form 8606 to track thesenon-deductible contributions.
And it can be kind of tricky,you know, as time marches on,
(15:41):
because we're talking aboutyears upon years upon years of
making contributions to yourIRA.
And then you've been takingthese contributions deductions,
maybe some partial, maybe no.
And then there's a little bit ofa formula that goes into, that's
put into place when you starttaking your tax deductions that
calculates on every withdrawalthat you make how much is
(16:05):
actually going to be taxable.
So similarly, if you and yourspouse are not covered by an
employer-sponsored plan like a401k and you're single or
married, then It doesn't matterwhat your income is.
If you're single or marriedfiling jointly, you can take a
full tax deduction.
And if you're married filingjointly but one spouse is
(16:28):
covered, then if your income is$230 or less, you can take a
full tax deduction.
If you're single, there's nopartial or non-deductible, but
there is if you're marriedfiling jointly and one spouse is
covered.
So again, full tax deduction ifyour income is$230,000 or less.
If it's more than$230,000 butless than$240,000, there's only
(16:50):
a partial tax deduction.
And if your income is above$240,000, you can still make a
contribution, but it'snon-deductible.
You cannot take a tax deductionin that case.
So...
That's just IRS rules.
Maybe that'll change someday,but that's the way it is today.
So speaking of that, for 2024,you can make a$7,000
(17:15):
contribution to your IRA.
And if you're 50 or older, youcan take an additional$1,000.
And if you are...
50 or over, and you have a 401k,403b, 457, or a SARSEP plan,
then your annual contribution is$23,000.
If you're 50 or over, you canadd an additional$7,500.
(17:36):
If you have a simple IRA plan,then your annual contribution
will be$16,000.
If you're 50 or over, you canadd an additional$3,500.
So all of those are basically$500 changes from the prior
year.
If you have a Roth IRA,similarly, your annual
(17:58):
contribution is$7,000.
If you're 50 or over, you have a$1,000 catch-up.
However, when you do want tocontribute to a Roth IRA, there
are eligibility requirements.
levels for contributions, whichmeans if you're single or head
of household, your income, if itfalls between 146,000 or 161,
(18:23):
then you are only gonna be ableto make a partial contribution.
If it goes above that, nocontribution.
Same thing with married filingjointly.
If your income is between$230,000 and$240,000, then
you're going to be able to makea partial.
If it goes above$240,000, nocontribution to your Roth IRA.
(18:45):
If you're married filingseparately, then the range is
from$0 to$10,000.
So if your income falls withinthat range, yes, you can make a
contribution to the Roth.
If it goes above$10,000, nocontribution.
Then you move to the traditionaland make your contribution that
(19:05):
way.
You can go to the IRS if youwant to see a table or learn
more.
I'll probably do another IRApodcast and talk a little bit
more about how that works.
But it just really right now isjust for your FYI, really.
So...
(19:25):
There are different compensationplans as well that have changed,
and some of those aresignificant, relevant, and
salient to your individual taxsituation.
It really just depends.
The other thing that's relevant,I think, to most people, and it
really just depends on thehealth care plan that you have.
So there are health savingsaccounts and flexible savings
(19:48):
accounts.
And there are dollar limitationsfor employee salary reductions
and contributions to flexiblehealth saving accounts.
They have increased by$3,200.
And for cafeteria plans thatpermit carryovers of unused
amounts, the maximum carryoveramount is$640, and that's a$30
(20:11):
increase from last year.
So for flexible savingsaccounts, these are special
accounts that you put money intoand you use it to pay for
certain out-of-pocket healthcare costs.
So you contribute pre-tax moneythrough your payroll deduction,
and that reduces your taxableincome.
The funds that go into yourflexible savings account are
(20:33):
used within the year, and someof them have a grace period
that, like I said, will allowfor carryover of a certain
amount of money.
Like I said, this year it'sgoing to be$640 from the prior
year.
But you can use it to pay forcertain medical costs, dental
and vision expenses that are notcovered by insurance.
(20:55):
Also things like co-pays, somedeductibles, prescription
medications.
maybe even some over-the-counteritems.
I'm not an expert in these, butthose are just some general
rules.
There are really two types offlexible savings accounts.
There's the health care flexiblespending account that, like I
said, covers medical, dental,vision expenses for you, your
(21:18):
spouse, and your dependents.
And there's also a dependentcare flexible savings account.
And like the name suggests, itcovers eligible expenses that
are related to the care ofdependents while you're at work,
like daycare, after schoolprograms, even elder care.
But for 2024, the contributionlimits for an FSA are$3,050 per
(21:38):
year for the health careflexible spending account,$5,000
per year for single or marriedfiling jointly, and$2,500 per
year for married filingseparately.
Again, the benefits really arethat you put pre-tax money in,
it reduces your taxable income,and it saves you money on your
federal, state, and socialsecurity taxes.
(21:58):
So the full amount that youelect to contribute in your
healthcare FSA is availablereally for use at the beginning
of the year.
Even though your contributionsare made throughout the year,
you can use that moneythroughout the year.
And again, anything that'sreally not covered by your
health insurance plans.
But the downside to a flexiblespending account is they have a
use it or lose it rule.
(22:19):
And that means Any funds thatare not used by the end of the
year are forfeited.
You lose them.
Some plans, like I said, willallow a small carryover amount,
but some even allow a smallgrace period of maybe two and a
half months to use what's leftover.
That's not...
set in stone rule just dependson the plan.
(22:39):
For dependent care, you know,they have even stricter rules
and lower contribution limitsthan the health care FSAs.
But, you know, a lot of peopleuse them.
I knew plenty of people who, youknow, calculated how much they
were going to pay in child carefor the year, and that's how
much money would go into theirFSA.
So it's helpful.
(23:00):
That's what I'm really trying tosay.
But if you have a self-onlycoverage, maybe in a medical
savings account, then that planwill have an annual deductible
that's not less than$2,800.
That's a$150 increase from theprior year, but not more than
$4,150, which is an increase of$200 from 2023.
(23:20):
So these are, again, plans thatare a tax advantage to help you.
They are tax advantage savingsaccounts that are designed to
help you save for future medicalexpenses.
And there are two types of theseas well.
There are the Archer MSA and theMedicare FSA.
So the Archer is a personalsavings account for medical
expenses.
It's really only available toself-employed people or
(23:43):
employees of small businesses.
And the Medicare FSAs aresimilar to the health savings
account, but they'respecifically for people who are
enrolled in high-deductibleMedicare Advantage plans, which
is also known as Medicare PartC.
Again, a whole different ball ofwax, but if it falls into your
realm, it's something to beaware of.
(24:04):
So contributions to an ArcherMSA can only be made by the
account holder or the employer,but not both in the same year.
Medicare MSA, the contributionsare made by Medicare, but not by
the account holder.
Contributions are made withpre-tax dollars.
It reduces your taxable income,but your earnings will grow
tax-free.
(24:24):
Very similar to like a Roth IRAor even your traditional IRA.
I should have just said IRA,period.
But The funds, again, for anymedical expenses, including
doctor visits, hospital stays,prescription drugs, and really a
lot of other out-of-pockethealth care expenses.
(24:44):
These contributions to an MSAare set annually.
An Archer MSA, it's typically apercentage of your health care
plan deductible.
The MSA funds remain within thecount holder.
with the account holder, even ifyou change jobs or healthcare
plans.
The HSAs are really differentfrom the MSAs, which are just
(25:06):
more limited in terms of who canopen them.
And again, if you'reself-employed or in a small
business that offers one, it canbe very helpful to you, or
especially again, if you're in ahigh deductible healthcare plan.
So there is something foreveryone in that realm, if those
circumstances apply to you.
(25:27):
So let's move on from that.
And another thing that'schanging in 2024 is the foreign
income tax.
earned exclusion, which is$126,500, which is an increase
from$120,000 for 2023.
Also changing is the estates fordecedents who die in 2024.
(25:48):
They have an exclusion amount of$13,610,000.
That's above the$12,920 for lastyear.
So meaning if you have...
an estate that's above that,then estate taxes are going to
apply.
If you're below that, no estatetaxes will apply.
(26:10):
There's also the annual gift taxexclusion that has gone up to
$18,000 from$17,000 last year.
Also, there is a change to theadoption tax credit for 2024.
It's gone up by a little bit.
(26:30):
Let me restate that.
It has gone up to$16,810, whichis above the$15,950 for last
year.
So it's helpful.
Hey, if it's money and you'reable to get it, take it, right?
Also, some of the things thatdid not really change, their
(26:55):
personal exemption for 2024remains at zero as it was for
2023.
That is an elimination of thepersonal exemption that was a
provision of the Tax Cuts andJobs Act.
and there's just really nothingmore to really say about that.
There is some other changes toyour plans if you're in a 401K
(27:17):
or a 403B, meaning if you have aplan and you're allowed to take
advantage of it, certainly doso.
But for 2024, the limit is$23,000.
It's a$500 change from...
prior year.
If you're over 50, there's acatch-up contribution, which is
again a$500 increase to$8,000now.
(27:41):
As I mentioned, the traditionalor Roth IRA contribution has
gone up by$500 to$7,000, as wellas the catch-up contribution for
over 50 has gone up by$500 to$8,000.
Just to reiterate, The healthsavings account, if you're
single, has gone up by$300 to$4,150.
And the health savings accountfor family has gone up by$600 to
(28:04):
$8,300.
So all of those are relevantchanges.
There are some other ones that Iwant to go over briefly.
I'm going to try to, I knowwe're already about a half an
hour, and I know that this isprobably getting a little
confusing because there's a lotto it.
I might have to do round two,but I'm going to go through some
(28:27):
of these just real quickly andsee how far I can get for you.
But as I mentioned, the gift taxhas gone up to$18,000.
The estate tax has increased aswell to$13.6 million.
as well as the earned income taxcredit.
That's a refundable tax creditthat's for low, moderate income
(28:50):
workers.
So you'll see a bump in 2024.
This credit really depends onthe income and the number of
children, but people withoutkids can also qualify.
So you really want to takeadvantage of that if you can.
And in 2024, the credit will goup to$7,830 for taxpayers with
(29:10):
three or more children.
Also, there's the OpportunityTax Credit.
The American Opportunity TaxCredit is a federal tax credit
that allows you to lower yourtax bill by up to$2,500 if you
paid that much in undergraduateeducation expenses last year.
You can claim all of the first$2,000.
that you spend on eligibleeducation expenses like tuition,
(29:33):
school fees, books, andsupplies, plus 25% of the next
$2,000 for a total of$2,500.
So you cannot claim livingexpenses or transportation
costs, but tuition and fees,books, supplies are probably
going to be the lion's share ofit anyway.
So the American Opportunity TaxCredit is really for
(29:55):
undergraduate college studentsonly.
You have to be pursuing it.
degree or other recognizededucational credential you have
to be enrolled at least halftime or at least one for one for
at least one academic periodbeginning in the tax year you
and have not finished the firstfour years of your education by
the beginning of the tax yearand you have not claimed the
(30:17):
American opportunity tax creditfor more than four years and you
do not have a felony drugconviction by the end of the
year So you can claim the crediton your taxes if you're a
student for a maximum of fouryears as long as no one else
like your parents claims you asa dependent.
If so, your dependents willclaim the credit instead of you.
(30:38):
But if you're a student and youpaid for your educational
expenses, you just have to belisted on your return and not be
dependent on anyone else'sreturn.
Hopefully that makes sense.
So there's some, for that, thereare some modified adjusted gross
income ranges Just go throughone.
(31:00):
For example, if you're single,it's$80,000 or less.
Married filing jointly, it's$160,000 or less.
And that will give you the fullcredit.
If you're single and your incomeis more than$80,000 but less
than$90,000, you only get apartial credit.
If you're married filing jointlyand your income is more than
$160,000 but less than$180,000,only partial.
If you're a single filer, yourincome is$90,000 or more,
(31:21):
there's no credit.
If you're married filingjointly, your income is more
than$180,000, also no credit.
So the American Opportunity TaxCredit, what it does is it
really lowers the amount oftaxes you pay.
If you owe$3,000, for example,in taxes and you get the full
$2,500 credit, then you onlyhave to pay$500 to the IRS.
(31:41):
Is this a refundable credit?
Yes.
That means you can still receive40% of the American Opportunity
Tax Credit value up to$1,000,even if you earned no income
last year or you owe no tax.
For example, if you qualifiedfor the refund, the credit could
increase the amount you'dreceive by up to$1,000.
And that's why the AmericanOpportunity Tax Credit, it's
(32:02):
usually the best education taxbreak for students and your
families.
There's also the LifetimeLearning Credit.
The Lifetime Learning Credit isa federal tax credit that can
reduce your taxable income by upto$2,000 if you're pursuing an
undergraduate, graduate, orvocational even, a vocational or
even a non-degree program.
So unlike the AmericanOpportunity Tax Credit, there's
(32:23):
no limit to the number of taxyears in which you can claim the
credit.
The way this works is you canclaim 20% of the first$10,000
you paid towards your tuitionand fees for a maximum of$2,000.
These for things like coresupplies, living expenses,
transportation costs that arenot covered are qualified
expenses for the LifetimeLearning Credit.
(32:44):
The Lifetime Learning Credit isreally, it's ideal for graduate
students or anyone else takingclasses to build your new...
to develop new skills, even ifyou already claim the American
Opportunity Tax Credit on yourtaxes in the past.
So any of these things, youreally want to seek some
competent tax advice or read upon the IRS and just follow the
(33:04):
rules.
So again, you don't get introuble by it.
Some of these things I'll try tocover in a little bit greater
detail in future podcasts aswell.
But again, students can claimthe lifetime earning credit for
themselves if you file your owntaxes, or if your parents are
claiming you as a dependent,they can also claim To claim the
lifetime earning credit, thecriteria is you have to be
(33:24):
enrolled or taking courses at aneligible educational
institution, be taking highereducation courses to get a
degree or another recognizededucation credential or to
improve your job skills, and beenrolled for at least one
academic period beginning at thetax year.
So again, other informationregarding the income ranges you
(33:47):
want to take a look at.
on the IRS website.
I think that's where I'm goingto stop right now because I know
it's a firehose of informationand there's a lot in there.
I'm going to try to go over moreinformation as we go forward.
I think the more you know, thebetter you're going to be always
because knowledge is power.
(34:09):
That's pretty much it for metoday.
And other than that, I hope youhave a great day and I will talk
to you next time.
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