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Will your 2024 income tax bracket be different than it is in 2023? Each year, the Internal Revenue Service (IRS) evaluates tax provisions and adjusts them if necessary. Due to the continued high inflation rate, the IRS recently released the 2024 federal tax brackets, which again increase the income thresholds of each tax bracket, as well as deduction amounts.
Income tax brackets are ranges of income taxed at specific rates. For example, one range of income may be taxed at 10 percent, the next range at 12 percent, and so on. The rates and bracket thresholds vary based on filing status (single, married filing jointly, etc.).
In 2024, the tax brackets range from 10 percent to 37 percent. These rates are the same as 2023, but the difference is the taxable income range for each rate.
If your income is over $609,350 as an individual or $731,200 as a joint filer, your 2024 marginal tax rate is 37 percent. In 2023, the income level for the 37 percent marginal tax rate was $578,125/$693,750 for married couples filing jointly.
Here’s a summary of the other tax bracket changes for 2024:
Video: How IRA Activity Can Affect Tax Brackets
The IRS increased the 2024 standard deduction amounts as well. The standard deduction is a fixed amount you can deduct from your federal income taxes that reduces your taxable income. The amount varies depending on your filing status.
When you file your taxes, you have two choices:
[Related: Tax Time Checklist]
The 2024 standard deduction amounts are:
The marginal tax rate refers to the tax rate you pay on income exceeding the amount of the standard deduction in your tax bracket. In other words, you won’t be charged that rate on your entire income – just the portion determined to be your taxable income.
The IRS charts explain how to determine your tax responsibility:
These tax rates apply to your 2024 tax return, which is due on April 15 or Tax Day, 2025.
This is a summary of some of the IRS tax updates. For more details, including instructions for more types of taxpayers (Head of Household, Married Filing Single, etc.), see the IRS publication or consult with your tax professional.
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