IRS releases inflation adjustments for 2024

The IRS issued its annual inflation adjustments for more than 60 items that will apply for the 2024 tax year. The adjustments outlined in Revenue Procedure 2023-43 include changes to the standard deduction amounts, the marginal income tax rates, the alternative minimum tax exemption, the earned income tax credit and many other items. Some of the more noteworthy adjustments are listed in the sections that follow.

Standard deduction

Filing status 2024 amount 2023 amount
Single and married filing separately $14,600 $13,850
Married filing jointly $29,200 $27,700
Head of household $21,900 $20,800

Marginal tax rates

Single

2024 taxable income Marginal tax rate
$11,600 or less 10%
$11,601 to $47,150 12%
$47,151 to $100,525 22%
$100,526 to $191,950 24%
$191,951 to $243,725 32%
$243,726 to $609,350 35%
Over $609,350 37%

Married filing jointly

2024 taxable income Marginal tax rate
$23,200 or less 10%
$23,201 to $94,300 12%
$94,301 to $201,050 22%
$201,051 to $383,900 24%
$383,901 to $487,450 32%
$487,451 to $731,200 35%
Over $731,200 37%

Head of household

2024 taxable income Marginal tax rate
$16,550 or less 10%
$16,551 to $63,100 12%
$63,101 to $100,500 22%
$100,501 to 191,950 24%
$191,951 to $243,700 32%
$243,701 to $609,350 35%
Over $609,350 37%

Married filing separately

2024 taxable income Marginal tax rate
$11,600 or less 10%
$11,601 to $47,150 12%
$47,151 to $100,525 22%
$100,526 to $191,950 24%
$191,951 to $243,725 32%
$243,726 to $365,600 35%
Over $365,600 37%

Alternative minimum tax exemption

Filing status Exemption amount Phaseout threshold Complete phaseout
Single $85,700 $609,350 $952,150
Married filing jointly $133,300 $1,218,700 $1,751,900
Married filing separately $66,650 $609,350 $875,950
Estates and trusts $29,900 $99,700 $219,300

Other notable changes for 2024

  • Annual exclusion for gifts: $18,000, up from $17,000 for 2023
  • Maximum earned income tax credit: $7,830 for qualifying taxpayers with three or more qualifying children, increased from $7,430 for 2023
  • Monthly limitation for the qualified transportation fringe benefit and monthly limitation for qualified parking: $315, a $15 increase from 2023
  • Limitation on employee salary reductions for contributions to health flexible spending arrangements: $3,200
  • Basic exclusion for estates: $13,610,000, up from $12,920,000 for 2023
  • Foreign earned income exclusion: $126,500, up from $120,000 for 2023

To get all of the updated information you’ll need for tax season 2024, our upcoming webinar, Are You Ready for Tax Season?, will provide you with updates on key changes in tax laws for 2023, including insights on energy credits from the IRS under the 2022 Inflation Reduction Act. This session will equip you to accurately prepare your clients’ returns and effectively handle employee retention credit (ERC) claims. Register for the live or on-demand webinar at natptax.com/webinars.

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