Tax Season in full swing

Tax season in the United States is currently in full swing, with the deadline for filing taxes approaching on April 15. There have been several changes for taxpayers this year, including updated tax brackets, new tax credits, and expanded eligibility for free filing services.

The Internal Revenue Service (IRS) adjusts income tax brackets and standard deductions annually to keep up with inflation. This means that filers might find themselves in different tax brackets even if their income remains the same. However, the adjustments are designed to maintain individuals' economic standing relative to inflation.

New tax credits introduced this year include an electric vehicle tax credit and a credit for home energy efficiency upgrades. The electric vehicle tax credit offers up to $7,500 for eligible vehicles, while the home energy efficiency credit refunds 30% of renovation costs, up to $3,200.

Additionally, there's a potential expansion of the child tax credit, pending Senate approval, which could increase the credit to $3,600 for certain filers. The IRS advises taxpayers to not delay filing their taxes, as they will automatically apply the credit if it passes.

The IRS is also creating initiatives for efficient filing. Direct File, which is a pilot program, allows taxpayers to file directly with the IRS. Taxpayers in 12 states can participate, provided they meet income and filing criteria. Additionally, the IRS Free File program, offered through providers like FreeTaxUSA and TaxSlayer, has raised its income threshold to $79,000, making it accessible to more individuals.

These changes aim to simplify the tax filing process for taxpayers.