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IRS Announces Higher Tax Brackets For 2024
Key Points
- The Internal Revenue Service (IRS) has increased the tax brackets for 2024
- Higher brackets are due to rising inflation
- Single taxpayers must earn over $609,351 to be in the highest 37% tax rate
The IRS announced on Thursday higher tax brackets for the 2024 tax year due to rising inflation. What this means for taxpayers is that more income can be taxed at lower rates than previous years. There was also an increase of $750 to $1,500 in the standard deduction.
For 2024, single borrowers must earn over $609,351, while married couples must earn over $731,201 to be in the highest 37% tax bracket.
It’s important to remember that you only pay what you earn in that bracket. Even the highest earner in America will pay 10% on their first $11,600 in earnings.
There were also changes to the capital gains tax brackets for 2024 as well.
Related: How Effective Tax Rates Work
Federal Tax Brackets For 2024
Here are the tax brackets for 2024.
|
2024 Federal Tax Brackets |
|||
|---|---|---|---|
|
Tax Bracket/Rate |
Single |
Married Filing Jointly |
Head of Household |
|
10% |
$0 – $11,600 |
$0 – $23,200 |
$0 – $16,550 |
|
12% |
$11,601 – $47,150 |
$23,201 – $94,300 |
$16,551 – $63,100 |
|
22% |
$47,151 – $100,525 |
$94,301 – $201,050 |
$63,101 – $100,500 |
|
24% |
$100,526 – $191,950 |
$201,051 – $383,900 |
$100,501 – $191,950 |
|
32% |
$191,951 – $243,725 |
$383,901 – $487,450 |
$191,951 – $243,700 |
|
35% |
$243,726 – $609,350 |
$487,451 – $731,200 |
$243,701 – $609,350 |
|
37% |
$609,351+ |
$731,201+ |
$609,351+ |
See this full guide to 2024 Federal Tax Brackets.
Other Changes
Beyond the federal tax bracket changes, there were also changes to the capital gains tax brackets. This means more investors can shelter money in the 0% tax bracket on gains.
The IRS also updated the Alternative Minimum Tax exemption, and the Earned Income Tax Credit amounts.
Finally, there were updates to a variety of exclusions, include the foreign earned income exclusion and the estate and gift tax exclusion.
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Editor: Ashley Barnett Reviewed by: Chris Muller
The post IRS Announces Higher Tax Brackets For 2024 appeared first on The College Investor.
