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New income tax brackets for 2024: What are the changes in income thresholds for the 7 categories?

The Internal Revenue Service has released the official tax brackets for the 2024 fiscal year. Here’s a look at what they are to plan ahead for next year.

Update:
The 2024 IRS income tax brackets

The Internal Revenue Service has released the official tax brackets along with over 60 tax provisions for the 2024 fiscal year. The adjustment will apply to the seven federal tax brackets as well as the standard deduction that taxpayers can claim when filing.

Every year the Internal Revenue Service adjusts the earnings amounts for each of the tax brackets to account for inflation during the year. The annual increase to the amounts for next year reflected the 5.4 percent increase forecast by Bloomberg Tax & Accounting in September.

Here’s a look at what has changed for 2024.

2024 tax brackets

The seven brackets remain the same next year 10%, 12%, 22%, 24%, 32%, 35% and 37% which were set after the 2017 Tax Cuts and Jobs Act. These will be in place through the 2025 fiscal year, after which time, with no Congressional action, the tax rate will increase for all except the lowest.

The income thresholds for tax brackets are adjusted to reflect inflation or the cost of living. This is based on the Chained Consumer Price Index created by the Bureau of Labor Statistics through continuously tracking the changing price of a basket of goods and consumer purchasing behavior in response to that change.

The annual adjustment is designed to avoid “bracket creep” when people are pushed into a higher income bracket or inflation reduces the value of other deductions or credits. So, for example instead of 10% being applied to the first $11,000 of income as in 2023, it will now be applied to the first $11,600 for a taxpayer filing individually in 2024.

Standard deductions in 2024

Also, the standard deduction will increase in 2024 by $750 to $14,600 for single filer or married but filing separately, by $1,100 to $21,900 for head of households and $1,500 to $29,200 for married taxpayers filing jointly.

An additional standard deduction of $1,950 will apply to those who are either 65 and older or blind, and the amount doubles if both apply to a taxpayer in 2024.

Dependents that can be claimed on another person’s tax return for the 2023 fiscal year are limited to a standard deduction of either $1,300 or your earned income plus $450, whichever is greater. However, the total can’t exceed the basic standard deduction for your filing status.

Filing status20242023
Single filers & Married couples filing separately$14,600$13,850
Married couples filing jointly & surviving spouses$29,200$27,700
Head of Household$21,900$20,800

Your filing status could save you extra money

There are five categories of filers and conditions apply to the one you should use to file your taxes. The main determiner is your marital status on 31 December of the year for which you are reporting taxes, that will be the one you use for the entire year. It’s possible that more than one filing status applies to you, so the IRS recommends that you use the filing status that will reduce your tax liability the most.

Five US filing statuses:

  • Single: For those who are not married, divorced or legally separated.
  • Married Filing Jointly: Married couples can choose to file a joint tax return. Widow(er)s can also use this in the year their spouse died.
  • Married Filing Separately (MFS): Married couples also have the choice of filing separately if it is more financially beneficial.
  • Head of Household (HoH): The IRS cautions not to choose the by mistake and special rules apply to qualify for this filing status. Generally, this status applies if you are not married and must have paid more than half the cost of keeping up a home for yourself and a qualifying person.
  • Qualifying Widow(er) with Dependent Child: This status is similar to married filing jointly. It is applicable for only two years and conditions apply.

For more information check the Dependents, Standard Deduction, and Filing Information in Publication 501.

To help taxpayers determine which filing status applies to them the IRS has an online tool “What Is My Filing Status?

Income taxes are progressive

The tax brackets are progressive, so if you file as a single filer and have a taxable income of $50,000, you don’t pay 22 percent on the whole of your taxable income. You would pay 10 percent on the first $11,600 ($1,160), 12 percent on the income between $11,600 and $47,150 ($4,266), and then 22 percent on the remaining $2,850 ($627) for a total of $6,053.00 as opposed to $11,000. That amount is $254.50 less than you would be taxed for the same income in 2023.

2024 tax bracket income thresholds

Tax rateSingle filers & MFSMarried filing jointlyHead of household
37%for incomes over $609,350for incomes over $731,200for incomes over $609,350
35%for incomes $243,725 to $609,350for incomes $487,450 to $731,200for incomes $243,700 to $609,350
32%for incomes $191,950 to $243,725for incomes $383,900 to $487,450for incomes $191,950 to $243,700
24%for incomes $100,525 to $191,950for incomes $201,050 to $383,900for incomes $100,500 to $191,950
22%for incomes $47,150 to $100,525for incomes $94,300 to $201,050for incomes $63,100 to $100,500
12%for incomes $11,600 to $47,150for incomes $23,200 to $94,300for incomes $16,550 to $63,100
10%incomes of $11,600 or lessfor incomes of $23,200 or lessfor incomes of $16,550 or less

2023 tax bracket income thresholds

Tax rateSingle filers & MFSMarried filing jointlyHead of household
37%for incomes over $578,125for incomes over $693,750for incomes over 578,100
35%for incomes $231,250 to $578,125for incomes $462,500 to $693,750for incomes $231,250 to $578,100
32%for incomes $182,100 to $231,250for incomes $364,200 to $462,500for incomes $182,100 to $231,250
24%for incomes $95,375 to $182,100for incomes $190,750 to $364,200for incomes $95,350 to $182,100
22%for incomes $44,725 to $95,375for incomes $89,450 to $190,750for incomes $59,850 to $95,350
12%for incomes $11,000 to $44,725for incomes $22,000 to $89,450for incomes $15,700 to $59,850
10%incomes of $11,000 or lessincomes of $22,000 or lessincomes of $15,700 or less