The IRS has introduced these modifications with the aim of more closely aligning tax brackets with the practical impact of inflation.
As we approach the tax season for the year 2024, taxpayers across the United States may notice something interesting when they sit down to file their taxes: their federal income tax brackets have changed.
IRS Aligns Tax Brackets with Inflation
While the tax rates themselves remain consistent, the thresholds for each bracket have been adjusted, resulting in an overall tax framework that may benefit a broader range of taxpayers.
One noteworthy change is the upward adjustment of the income thresholds in these tax brackets. These new brackets feature upper limits that are 7% higher than those of the previous year, which is a response to the rising cost of living.
The idea behind this change is to provide relief for individuals and families whose incomes have not kept pace with inflation, effectively preventing them from being pushed into higher tax rates.
For single filers, the new tax brackets for 2024 are as follows:
- $11,000 or less in taxable income: 10% of taxable income
- $11,001 to $44,725 in taxable income: $1,100 plus 12% over $11,000
- $44,726 to $95,375 in taxable income: $5,147 plus 22% over $44,725
- $95,376 to $182,100 in taxable income: $16,290 plus 24% over $95,375
- $182,101 to $231,250 in taxable income: $37,104 plus 32% over $182,100
- $231,251 to $578,125 in taxable income: $52,832 plus 35% over $231,250
- $578,126 or more in taxable income: $174,238 plus 37% over $578,125
For married couples filing jointly, the new tax brackets are as follows:
- $22,000 or less in taxable income: 10% of taxable income
- $22,001 to $89,450 in taxable income: $2,200 plus 12% over $22,000
- $89,451 to $190,750 in taxable income: $10,294 plus 22% over $89,450
- $190,751 to $364,200 in taxable income: $32,580 plus 24% over $190,750
- $364,201 to $462,500 in taxable income: $74,208 plus 32% over $364,200
- $462,501 to $693,759 in taxable income: $105,664 plus 35% over $462,500
- $693,751 or more in taxable income: $186,601 plus 37% over $693,750
Easing the Burden of Rising Living Costs
Additionally, the standard deduction, which helps lower your taxable income, has been raised for both single filers and married couples filing jointly.
For single filers, it has increased from $12,950 to $13,850, and for married couples filing jointly, it has increased from $25,900 to $27,700.
These changes in federal income tax brackets and deductions for 2024 offer potential tax benefits for many, particularly those whose incomes have struggled to keep up with the rising cost of living. As you prepare to file your taxes next year, these adjustments may result in a more favorable tax situation for you and your family.
