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Understanding 2024 Tax Brackets & Tax Law Changes

Each year, taxpayers must adjust to new tax laws, and 2024 is no exception.

To correctly plan for and file your tax return for 2024 , it’s important to be aware of what has changed and what new tax challenges and opportunities are available to you. By staying on top of tax updates and working with a trusted tax accountant, you will be prepared to stay in compliance with 2024 tax revisions and start off next tax season on the right foot.

2024 Income Tax Bracket Changes

Tax bracket changes are expected annually in response to new Internal Revenue Service (IRS) rules, updated tax legislation, and inflation.

The following income tax brackets are updated for 2024:

Marginal Tax RateIncome for Single FilersIncome for Married Filing Separately (MFS)Income for Married Filing Jointly (MFJ)Income for Head of House Filers
10%Not over $11,600Not over $11,600Not over $23,200Not over $16,550
12%$11,601‒47,150$11,601‒47,150$23,201‒94,300$16,551‒63,100
22%$47,151‒100,525$47,151‒100,525$94,301‒201,050$63,101‒100,500
24%$100,526‒191,950$100,526‒191,950$201,051‒383,900$100,501‒191,950
32%$191,951‒243,725$191,951‒243,725$383,901‒487,450$191,951‒243,700
35%$243,726‒609,350$243,726‒365,600$487,451‒731,200$243,701‒609,350
37%$609,351 or more$365,600 or more$731,201 or more$609,351 or more

2024 Standard Deductions

The IRS has established updated standard deductions based on the newly announced tax brackets:

Filing Status2024 Standard Deduction
Single$14,600
Married Filing Separately$14,600
Married Filing Jointly$29,200
Head of Household$21,900

2024 Retirement Contributions

Retirement contribution limits change annually. Here are some of the retirement contribution tax code changes for 2024.

401(k)
Plan
Contributions

In 2024, the maximum individuals can contribute to a 401(k) is $23,000 (pre-tax). Individuals 50 and older can contribute up to $7,500 in addition to the $23,000 limit for a total of $30,500.
Additionally, the contribution limit for the combined employee and employer contribution is $69,000.
These limits also apply to Thrift Savings plans (for federal employees) as well as 403(b) plans and 457 plans.

Individual Retirement Account (IRA) Contributions

IRA contribution limits for 2024 are set at $7,000 for people under 50 years of age and increase to $8,000 for people 50 years or older.

Roth
IRA
Contributions

Roth IRA contribution limits increased in 2024 to $7,000. Individuals 50 and over can contribute an extra $1,000.

Other Tax Code Changes to Know in 2024

A variety of other tax law changes may apply to your situation in 2024. We’ve included a few highlights below but be sure to contact a tax professional to get help understanding and implementing the full scope of this year’s tax code updates.

Gift Tax Limit

The annual exclusion for gifts in 2024 is now $18,000, up from $17,000 in 2023.

Alternative Minimum Tax (AMT) Exemption

As of 2024, the AMT exemption threshold for single filers or heads of household starts at $85,700 and begins to phase out at $609,350. For MFJ, the threshold is $133,300 and phases out at $1,218,700.

Flexible Spending Account (FSA)

Beginning in 2024, the limit for employee salary reductions for contributions to health FSAs increases to $3,200. For employee-sponsored FSA plans that allow employees to carryover unused amounts, the maximum carryover amount is now $640 (as opposed to $610 in 2023).

Health Savings Account (HSA)

Taxpayers with individual coverage under a High Deductible Health Plan (HDHP) can contribute up to $4,150 in 2024. The annual deductible must be at least $1,600, and out-of-pocket expenses are capped at $8,050.
Taxpayers with family coverage under a HDHP can contribute up to $8,300 in 2024. The annual deductible must be at least $3,200, and out-of-pocket expenses are capped at $16,100.
Additionally, as of 2024, individuals over 55 can contribute an extra $1,000 (up to $5,150 for individual coverage and up to $9,300 for family coverage to their HSA.

Foreign Earned Income Exclusion

The 2024 foreign earned income exclusion in 2024 is $126,500 and applies to qualifying United States citizens or resident aliens with tax homes in a foreign country.

Earned Income Tax Credit

Qualifying taxpayers with three or more qualifying children have a maximum Earned Income Tax Credit of $7,830 as of 2024.

How to Stay in Compliance with 2024 Tax Law Changes

Tax laws and brackets change every year. Ensure you are as prepared as possible for tax season and stay in compliance with these updates by following these tips.

1. Investigate New Tax Deduction Opportunities

Are there new or adjusted tax deductions or credits that could help to minimize your tax liability? Investigate your options to see if any new deductions or credits apply to you and take advantage of those that do .

If you have questions about your tax deduction options, talk to a trusted tax professional.

2. Keep Careful Tax Records

When tax season comes around, you can make things easier for yourself, your family, and your business by keeping careful records and organizing them appropriately. With well-maintained tax records in hand, you and your accountant can avoid errors, file your taxes correctly, and prevent delays that slow your refund.

3. Document Charitable Contributions

Do you plan to claim charitable donations as itemized deductions on your tax return? If you contribute more than $250 to a qualified organization, make sure you have a written acknowledgment on hand to document your gift.

4. Seek Expert Advice

Tax law is complicated and nuanced. It’s in your best interest to seek advice from a tax professional or certified public accountant (CPA) with experience in tax compliance to confirm you correctly file your 2024 taxes.

Contact Fisher, P.A. for 2024 Tax Filing Assistance

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