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What's New for 2024

• In 2024, the standard deduction is $14,600 for single filers and married persons filing separately, $21,900 for a head of household, and $29,200 for a married couple filing jointly and surviving spouses.
• The percentage of bonus depreciation allowed on eligible property has decreased from 80% to 60%
• The annual gift tax exclusion is $18,000 for 2024.
• The marginal tax rates for 2024 are:
  • 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
  • 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
  • 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
  • 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
  • 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  • 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  • 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).
• If you place in service a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) in 2023 or after, you may qualify for a clean vehicle tax credit.  You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.  The credit is available to individuals and their businesses.
• To qualify:
  • Buy it for your own use, not for resale
  • Use it primarily in the U.S.
  • Your adjusted gross income can not exceed:
    • $300,000 for married couples filing jointly or a surviving spouse
    • $225,000 for heads of households
    • $150,000 for single individuals or married individuals filing separately.This limit also applies to business entities (partnerships and corporations.
  • The credit amount is:
    • The credit will be $3,751 ($2,500 + 3 times $417), the credit amount for a vehicle with a minimum 7 kilowatt hours of battery capacity.
    • Plus $417 for each kilowatt hour of battery capacity beyond 7 kilowatt hours.
    • The maximum allowable is $7,500.
  • Vehicles will have also to meet new critical mineral and battery component requirements for a credit up to:
    • $3,750 if the vehicle meets the critical minerals requirement only.
    • $3,750 if the vehicle meets the battery components requirement only
    • $7,500 if the vehicle meets both requirements.
  • A vehicle which doesn't meet either requirement is not eligible for any credit.
  • Additional requirements for qualified vehicles:
    • Have a gross vehicle weight rating of less than 14,000 pounds
    • Be made by a qualified manufacturer  
    • Undergo final assembly in North America
  • The vehicle must be a new and the seller must  report your name and taxpayer identification number to the IRS for you to be eligible to claim the credit.

  • In addition, the vehicle's manufacturer suggested retail price (MSRP) can't exceed:

  • $80,000 for vans, sport utility vehicles and pickup trucks
  • $55,000 for other vehicles

           These rules are obviously quite complex.  To see if a vehicle qualifies, go to:

            List of qualifying vehicles.

• There is also a credit for used electric vehicles.  If you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000.

  • To qualify, you must:

    • Be an individual who bought the vehicle for use and not for resale

    • Not be the original owner

    • Not be claimed as a dependent on another person's tax return
    • Not have claimed another used clean vehicle credit in the 3 years before the purchase date
  •   There are additional gross income limitations to qualify.  These are
    • $150,000 for married filing jointly or a surviving spouse
    • $112,500 for heads of households
    • $75,000 for single individuals and married individuals filing separately.  This limit also applies to business entities (partnerships and corporations.
  • To qualify, a vehicle must meet all of these requirements:
    • Have a sale price of $25,000 or less. Sale price includes all dealer-imposed costs or fees not required by law. It doesn't include costs or fees required by law, such as taxes or title and registration fees.
    • Have a model year at least 2 years earlier than the calendar year when you buy it. For example, a vehicle purchased in 2024 would need a model year of 2022 or older.
    • Not have already been transferred after August 16, 2022 to a qualified buyer.
    • Have a gross vehicle weight rating of less than 14,000 pounds
    • Be an eligible FCV or plug-in EV with a battery capacity of least 7 kilowatt hours
    • Be for use primarily in the United States
  • Also, the purchase will only qualify if:
    • You buy the vehicle from a dealer.
    • For qualified used EVs, the dealer reports required information to you at the time of sale and to the IRS.
• There is also a clean vehicle credit available for businesses and tax exempt organizations.  For details, see Clean Vehicle Tax Credit.