So, you’ve probably noticed that prices have been creeping up lately, from everyday items like groceries to big-ticket items like plane tickets. Well, good news on the tax front: the IRS is stepping in to ease the load on taxpayers. They just announced some tweaks to the tax brackets for the 2024 tax season.
In a move that affects more than 60 tax rules, the IRS is bumping up the income thresholds for each tax bracket. This means you’ll have to pay a higher percentage of your income only if you earn above certain levels. Here’s the lowdown:
- If you’re single and make $11,600 or less ($23,200 for married couples filing jointly), you’ll pay a 10% rate.
- Earn over $11,600 ($23,200 for married couples)? You’ll be in the 12% bracket.
- For incomes exceeding $47,150 ($94,300 for married couples), you’ll hit the 22% bracket.
- The rates climb as income does, topping out at 37% for individuals earning over $609,350 and married couples filing jointly earning over $731,200.
These thresholds are around 5.5% to 6% higher than last year’s, giving you a bit more breathing room. For instance, last year, the lowest rate kicked in for single filers earning $11,000 or less.
The top tax rate is also getting a bump, reaching $609,350 for individuals and $731,200 for married couples filing jointly. That’s up from $578,126 and $693,751, respectively, last year. The idea is to let you pay lower taxes on more of your income.
On top of that, the standard deduction is getting a boost of 5.4%. So, individual taxpayers can now deduct $14,600, up $750 from last year. Married couples filing jointly can deduct $29,200, $1,500 more than in 2023.
For those with flexible spending accounts (FSAs) and health savings accounts (HSAs), there’s good news too. You’ll be able to sock away more of your pre-tax income, meaning you won’t pay taxes on that money. Starting in 2024, you can contribute up to $3,200 for FSAs and $4,150 for HSAs.
These changes kick in for the 2024 tax season, affecting the taxes you file based on your 2024 income. So, you’ll see the benefits when you file your taxes in 2025.
Get Compliant and Get Tax Relief
Morris and Associates are experts when it comes to helping individuals and companies find tax relief in Georgia but can help no matter where you live or whatever tax questions you have. Contact us to help with your taxes and possibly even reduce the amount that you owe.
