IRS: 2024 Income Tax Bracket Thresholds – Inflation Strikes Again!
Inflation has been a dark cloud over the economy for a few years now. But even the darkest cloud must have at least a little bit of silver lining – and the IRS has adjusted income tax brackets for 2024 upward by 5.4%, based on the consumer price index (CPI).
Income Tax Brackets – 2023 – 2024:
| Income Thresholds | ||||
| Individuals | Married Filing Jointly | |||
| Income Tax Rate | 2023 | 2024 | 2023 | 2024 |
| 37% | $578,126 | $609,351 | $693,751 | $731,201 |
| 35% | $231,251 | $243,726 | $462,501 | $487,451 |
| 32% | $182,101 | $191,951 | $364,201 | $383,901 |
| 24% | $95,376 | $100,526 | $190,751 | $201,051 |
| 22% | $44,726 | $47,151 | $89,451 | $94,301 |
| 12% | $11,001 | $11,601 | $22,001 | $23,201 |
| 10% | $11,000 or less | $11,600 or less | $22,000 or less | $23,200 or less |
Standard Deduction:
The standard deduction is also increased – for individuals, to $14,600 for 2024 from $13,850 for 2023; for married joint filers to $29,200 for 2024 from $27,700 for 2022. Taxpayers over age 65 can claim an additional standard deduction amount of $1,950 for single filers and $1,550 for an individual joint filer.
Gift & Estate Exclusions:
The annual gift tax exclusion will rise to $18,000 from 2023’s $17,000 limit.
The estate tax threshold will increase to $13,610,000 per individual from $12,920,000 in 2023.
Alternative Minimum Tax:
The Alternative Minimum Tax (AMT) exemption for 2024 is increased to $85,700 from $81,300 in 2023 for individuals, and to $133,300 from $126,500 in 2023 for married couples filing jointly. Phase out begins at $609,350 for individuals and $1,218,700 for married joint filers, compared with $578,150 and $1,156,300 in 2023, respectively.
Final Thoughts
These, of course, are only some of the significant changes the IRS has announced for 2024. Most tax credit limitations have been increased for 2024, though some items are by statue not indexable to inflation.
In addition, if you itemize, we want to remind you that one of the provisions of 2017’s Tax Cuts and Jobs Act (TCJA) was to remove the limitation on itemized deductions. Take advantage of this lesser-known benefit while it lasts!
There may be additional opportunities to leverage these increases to find you ways to keep even more of your hard-earned money – consult with your virtual CFO or financial planner to develop the best strategy (or strategies) for you and your family.
If you are interested in developing new tax planning and estate strategies for 2024, or updating your existing plans, please click here to email us directly – we are here to help .
Until next time –
Peace,
Eric