Title: IRS Announces Tax Adjustments for 2024: What You Need to Know
The IRS has recently unveiled the new income tax brackets and standard deduction amounts for tax year 2024. These changes are expected to impact the tax returns that most Americans will file in early 2025. The adjustments, which are designed to shield taxpayers from the effects of inflation, will not significantly alter their overall tax burden.
One of the key adjustments concerns the federal standard deduction. For individuals and married individuals filing separately, the standard deduction will increase to $14,600, a rise from $13,850 in the current year. Married couples filing jointly will witness their standard deduction increase to $29,200 from $27,700 presently. For those filing as head of household, the standard deduction will be $21,900, up from $20,800 today.
Although most filers choose to claim the standard deduction, some opt to itemize their deductions if they exceed the standard deduction amount. Individual circumstances may vary based on personal financial situations.
The US federal income tax code presently consists of seven tax rates, with each rate applying to a specific range of taxable income. For the year 2024, the new income tax brackets and rates will be as follows:
– 10%: Income up to $11,600 (or $23,200 for married couples filing jointly)
– 12%: Income over $11,600 (or $23,200 for joint filers)
– 22%: Income over $47,150 (or $94,300 for joint filers)
– 24%: Income over $100,525 (or $201,050 for joint filers)
– 32%: Income over $191,950 (or $383,900 for joint filers)
– 35%: Income over $243,725 (or $487,450 for joint filers)
– 37%: Income over $609,350 (or $731,200 for joint filers)
In addition to the income tax brackets, there are also adjustments to tax-advantaged accounts. The maximum contribution limit for Flexible Spending Accounts (FSA) will increase to $3,200 in 2024, up from $3,050 this year. Moreover, individuals will be allowed to save more in their tax-advantaged 401(k) and IRA accounts, offering potential long-term savings benefits.
For further details on these tax changes for 2024 and other relevant information, individuals can visit the IRS website for tax-inflation adjustments.
As tax season approaches, it is crucial for taxpayers to familiarize themselves with the latest adjustments to ensure accurate and efficient filing processes. Stay informed and make the most of the available deductions and credits to optimize your tax situation.
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