Check If Your Tax Bracket Will Change in 2024
On Thursday, the IRS released its annual adjustments for the 2024 tax year, which include changes to income tax brackets and a higher standard deduction. These shifts occur every year to explain ” price creep “, which causes people to pay more taxes due to inflation but not actually receive more income.
With these adjustments, you’ll have to earn more money in 2024 to qualify for higher tax brackets, meaning you could pay less in income taxes next year.
Income tax limits in 2024
Tax rates will not change next year, but the thresholds have increased:
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37% for income over $609,350 ($731,200 if filing jointly)
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35% for income over $243,726 ($487,450 if filing jointly)
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32% for income over $191,951 ($383,900 if filing jointly)
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24% for income over $100,526 ($201,150 if filing jointly)
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22% for income over $47,151 ($94,301 if filing jointly)
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12% for income over $11,601 ($23,201 if filing jointly)
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10% on income of $11,600 or less ($23,200 if filing jointly)
As a reminder, these are marginal tax rates , not flat rates on your entire income. That means you pay 10%, up to $1,160, on the first $11,600 you earn, 12% on $11,601 to $47,150, and so on.
Note. This change applies to the taxes you’ll pay in 2025 on income earned in 2024, not on returns filed in April of this year.
Standard increase in deduction
The standard deduction, which reduces your taxable income, will increase by more than 5% in 2024. For individuals, the standard deduction will be $14,600 (up $750 from $13,850). For married couples filing jointly, the standard deduction will be $29,200 (up $1,500 from $27,700).
By comparison, the standard deduction jumped about 7% in 2023. According to the IRS, 90% of filers claim the standard deduction rather than itemize on their returns.
The IRS is also increasing contribution limits by $500 for 401(k) plans and IRAs and allowing an additional $150 in contributions to flexible spending accounts (FSAs). The Earned Income Tax Credit for people with low and moderate incomes also increases from $7,430 in 2023 to $7,830 in 2024. ( Here’s how to find out if you qualify for a tax credit ).