The IRS recently announced the key 2024 inflation-adjusted federal tax amounts that will affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government.
Standard Deduction
Here are the inflation-adjusted standard deduction numbers for 2024 for those who don’t itemize:
$14,600 if you’re single or use married filing separate status (up from $13,850 in 2023)
$29,200 if you’re married and file jointly (up from $27,700)
$21,900 if you’re a head of household (up from $20,800)
Older taxpayers and those who are blind are entitled to additional standard deduction allowances. In 2024 for those age 65 or older or blind, the amounts will be: $1,550 for a married taxpayer (up from $1,500 in 2023) and $1,950 for a single filer or head of household (up from $1,850 for 2023).
For an individual who can be claimed as a dependent on another taxpayer’s return, the 2024 standard deduction will be the greater of: $1,300 (up from $1,250 for 2023) or $450 (up from $400 for 2023) plus the individual’s earned income, not to exceed $14,600 (up from $13,850 for 2023).
Ordinary Income and Short-Term Capital Gains
Here are the 2024 inflation-adjusted bracket thresholds for ordinary income and net short-term capital gains:
​ | SINGLES | MARRIED JOINT FILERS | HEAD OF HOUSEHOLD |
10% TAX BRACKET | $0 to $11,600 | ​$0 to $23,200 | $0 to $16,550 |
12% TAX BRACKET | $11,601 to $47,150 | $23,201 to $94,300 | ​$16,551 to $63,100 |
22% TAX BRACKET | $47,151 to $100,525 | $94,301 to $201,050 | $63,101 to $100,500 |
24% TAX BRACKET | $100,526 to $191,950 | $201,051 to $383,900 | $100,501 to $191,950 |
32% TAX BRACKET | $191,951 to $243,725 | $383,901 to $487,450 | $191,951 to $243,700 |
35% TAX BRACKET | $243,726 to $609,350 | $487,451 to $731,200 | $243,701 to $609,350 |
37% TAX BRACKET | $609,351 | $731,201 | $609,351 |
Long-Term Capital Gains and Dividends
Here are the 2024 inflation-adjusted bracket thresholds for net long-term capital gains and qualified dividends:
​ | ​SINGLES | MARRIED JOINT FILERS | HEAD OF HOUSEHOLD |
0% TAX BRACKET | $0 to $47,025 | $0 to $94,050 | $0 to $63,000 |
15% TAX BRACKET | $47,026 to $518,900 | $94,051 to $583,750 | $63,001 to $551,350 |
20% TAX BRACKET | $518,901 | $583,751 | $551,351 |
Gift and Estate Tax
The annual exclusion for gifts made in 2024 will be $18,000 (up from $17,000 for 2023). That means you can give away up to $18,000 to as many individuals as you wish without incurring gift tax or using up any of your unified federal gift and estate tax exemption.
In 2024, the unified federal gift and estate tax exemption will be $13,610,000 (up from $12,920,000 for 2023). For gifts, the annual exclusion for gifts to a noncitizen spouse will be $185,000 (up from $175,000 in 2023).
This article only covers some of the inflation-adjusted tax amounts. There are others that may potentially apply, including: alternative minimum tax parameters, kiddie tax amounts, limits on the refundable amount of the Child Tax Credit, limits on the adoption credit, IRA contribution amounts, contributions to your company’s retirement plan and health savings account amounts. Various other inflation-adjusted amounts may affect your tax situation if you own an interest in a sole proprietorship or a pass-through business. Contact us with questions at vaas@vaasprofessionals.com.