New Montana Tax Laws Are Coming For 2024
New Montana Tax Laws Are Coming For 2024
As the old saying goes, there are only two things that are a for sure thing: death and taxes. And while those two things are probably never going to change, how we deal with one of them will be changing into the new year.
Montana will have new tax laws into 2024. How are they going to affect you when you file? Have you heard about the Montana Income Tax Simplification?
Status, Brackets and Calculations All Change in 2024
For the new year, Montana will be implementing new changes to filing status, tax brackets and the calculations on your Montana taxable income.
According to Senate Bill 339 in terms of filing status:
Married taxpayers can no longer file separately from their spouses unless they are filing separately for federal purposes. Capital losses, passive losses, and excess business losses will no longer be allocated by spouse and will be treated the same as they are for federal purposes.
In regard to new tax brackets, the following will change:
Montana will have two tax brackets based on a taxpayer’s filing status and type of income. Much like the federal system, Montana will begin taxing long-term capital gains at a lower rate than ordinary income. Ordinary income is considered all taxable income that is not a net long-term capital gain.
Subtractions, Deductions and First Time Home Buyers Also Change
Under the new bill, which was signed in 2021, other new laws will go into effect. Those include:
- Taxpayers aged 65 and over will receive a $5,500 subtraction from federal taxable income
- Repealed deductions include unemployment compensation, tip income for certain servers, certain student loan payments and partial retirement disability deduction for those under 65
First time home buyers will also see a difference in 2024:
Tax Year 2023 is the last year that a taxpayer may establish or deposit into a Montana First Time Homebuyer Account. Beginning in 2024, taxpayers may only deduct deposits or interest on deposits from contributions on the account made before January 1, 2024. Deposits must be withdrawn within 10 years.
Make sure to check over your taxes in the new year!
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