The IRS announced new income limits for seven tax brackets on Thursday, providing some taxpayers breaks for 2024.
The tax brackets are being adjusted upward by 5.4% using a formula based on the consumer price index, which tracks the costs of goods and services purchased by consumers, per the IRS. The 2024 limits come after the agency historically expanded the tax brackets by 7% last year due to 2022's high inflation.Tax brackets will be increased by 5.4% for each type of filer for 2024, including those filing separately or as married couples.
For married couples filing jointly for tax year 2024, the standard education deduction rises to $29,200, a $1,500 increase from tax year 2023. For single taxpayers and married people filing separately, the standard deduction rises to $14,600, a $750 increase from 2023. For heads of household, the standard deduction will rise to $21,900, a $1,100 increase from 2023.
The top tax rate for 2024 will remain at 37% for individual single taxpayers with incomes greater than $609,350, or $731,200 for married couples filing jointly. The lowest rate is 10% for incomes of single individuals of $11,600 or less, or $23,200 for married couples filing jointly.The IRS increased other tax policies too. The 2024 tax year maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 in 2023.