The IRS has released income tax brackets and standard deductions for 2024. To plan ahead for what you’ll owe on your taxable income, here are the numbers.
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Highlights
- The IRS has released higher federal tax brackets for 2024 to adjust for inflation
- The standard deduction is increasing to $29,200 for married couples filing together and $14,600 for single taxpayers
- There are also changes to the alternative minimum tax, estate tax exemption, earned income tax credit and flexible spending account limits, among others
The Details
Per CNBC, here are the marginal tax brackets for 2024
Marginal tax brackets for tax year 2024
Married filing jointly
The table shows the income brackets for married couples filing jointly for the 2024 tax year.
| Taxable income | Taxes owed |
|---|---|
| $0 to $23,200 | 10% of the taxable income |
| $23,201 to $94,300 | $2,320 Plus 12% of the amount over $23,200 |
| $94,301 to $201,050 | $10,852 Plus 22% of amount over $94,300 |
| $201,051 to $383,900 | $34,337 Plus 24% of amount over $201,050 |
| $383,901 to $487,450 | $78,221 Plus 32% of amount over $383,900 |
| $487,451 to $731,200 | $111,357 Plus 35% of amount over $487,450 |
| $731,201 or more | $196,669.50 Plus 37% of the amount over $731,200 |
Marginal tax brackets for tax year 2024
Single individuals
The table shows the income brackets for single individuals for the 2024 tax year.
| Taxable income | Taxes owed |
|---|---|
| $0 to $11,600 | 10% of the taxable income |
| $11,601 to $47,150 | $1,160 Plus 12% of amount over $11,600 |
| $47,151 to $100,525 | $5,426 Plus 22% of amount over $47,150 |
| $100,526 to $191,950 | $17,168.50 Plus 24% of amount over $100,525 |
| $191,951 to $243,725 | $39,110.50 Plus 32% of amount over $191,150 |
| $243,726 to $609,350 | $55,678.50 Plus 35% of amount over $243,725 |
| $609,351 or more | $183,647.25 Plus 37% of the amount over $609,350 |
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High Standard Deduction
The standard deduction will also increase in 2024, rising to $29,200 for married couples filing jointly, up from $27,700 in 2023. Single filers may claim $14,600, an increase from $13,850.
Other Tax Provisions
The IRS also boosted figures for dozens of other provisions, such as the alternative minimum tax, a parallel system for higher earners and the estate tax exemption for wealthy families.
There’s also a higher earned income tax credit, bumping the write-off to a maximum of $7,830 for low- to moderate-income filers. And employees can funnel $3,200 into health flexible spending accounts.
Capital Gains Tax Rules for 2024
Per MorningStar.com, the IRS announced the tax rates will remain the same for the sale of investments and assets, while the thresholds will rise.
In 2024, individuals’ taxable income can be up to $47,025 to skip capital gains taxes with a 0% rate. That’s up from $44,625 this year. Married couples filing jointly can get the 0% rate if their taxable income doesn’t exceed $94,050. That’s up from $89,250.
The 15% tax rate applies to individuals with taxable income up to $518,900, which is up from $492,300. For married couples, the threshold is $583,750. That’s up from $553,850. Beyond those levels, the tax is 20%.
2024 Tax Rules for Gifts and Estates
MorningStar.com reports the annual gift tax exclusion rises to $18,000 per recipient, up from $17,000 per recipient. That’s a nearly 5.9% increase from 2023 levels. Above that limit, people giving the gift are generally responsible to pay taxes on the gift and have to file a gift tax return.
Estates of people who died in 2024 can be worth up to $13.61 million before federal estate taxes apply. The exemption is up from $12.92 million in 2023, also a more than 5% year-over-year increase.
Plan Ahead
Have you mapped out how you plan to maximize what you bring home while you’re working or when you retire? The odd thing about planning is that new rules, legislation, or planned pensions may impact your well-crafted plans.
Having a terrific tax resource is important. Making money is one thing, keeping money and minimizing what is paid out in taxes is a way to maximize what you work hard to earn. Thankfully I know many tax resources, feel free to reach out anytime!
Looking after your finances is covered in my 12-module online course Put Your Mind at Ease.
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There are three Live Q&A calls that provide you with a monthly check-in to clarify what’s needed and why this will help you in the long run. Think of it as accountability along the way! There’s a whole lot you can accomplish in 3 months 😉
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I’m always happy to answer your questions. Email or check out the website @ The Living Planner Lee Child said, “Hope for the best, plan for the worst.” Readying for the worst, while hoping for the best is a great one-two punch! ❣️Lynn
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