The Internal Revenue Service has announced the tax brackets and rates for the 2024 tax year. These adjustments are made annually to account for inflation and ensure the tax system remains fair and equitable.
2024 IRS Tax Brackets
The Internal Revenue Service (IRS) uses tax brackets to determine the income tax you owe. Your taxable income, which is your total income minus certain deductions and exemptions, falls into a specific tax bracket. You are then taxed at the marginal tax rate associated with that bracket.
The IRS employs a progressive tax system, where tax rates escalate with higher taxable incomes. This system functions through tax brackets, which specify income ranges subject to particular tax rates. Understanding your tax bracket is essential for accurately estimating your tax obligations and making sound financial choices throughout the year.
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Tax Brackets & Rates for 2024
The IRS updates tax brackets each year to reflect inflation. The federal income tax rates and their corresponding income ranges for tax year 2024 (the tax return you file in 2025):
| Tax Rate | Taxable Income (Single Filing Status) | Married )Taxable Income | Head of Household Taxable Income | Married filing Separately Taxable Income |
| 10% | $0 to $11,600 | $0 to $23,200 | $0 to $19,400 | $0 to $11,600 |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 | $19,401 to $88,350 | $11,601 to $47,150 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 | $88,351 to $189,750 | $47,151 to $100,525 |
| 24% | $100,526 to $191,950 | $201,051 to $383,900 | $189,751 to $379,150 | $100,526 to $191,950 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 | $379,151 to $482,050 | $191,951 to $304,675 |
| 35% | $243,726 to $609,350 | $487,451 to $609,350 | $482,051 to $609,350 | $304,676 to $609,350 |
| 37% | Above $609,350 | Above $609,350 | Above $609,350 | Above $609,350 |
Choosing the Right Filing Status for 2023 IRS Tax Brackets
Your filing status determines which tax bracket applies to you. The most common filing statuses are:
- Single: This applies to unmarried individuals, as well as those who are divorced or legally separated at the end of the tax year.
- Married Filing Jointly: This allows married couples to combine their income and deductions and file a single tax return. This can often result in a lower tax liability compared to filing separately.
- Married Filing Separately: Married couples can choose to file separate tax returns. This might be beneficial in certain situations, such as when one spouse has significantly higher income or medical expenses than the other.
- Head of Household: This status applies to unmarried individuals who pay more than half the cost of maintaining a household for a qualifying child or dependent relative.
Understanding Your Tax Bill under 2024 IRS Tax Brackets
This section dives into some key concepts that are crucial for understanding your tax bill and exploring tax season effectively:
Taxable Income vs. Gross Income:
- Your taxable income is not the same as your gross income. Gross income is all the money you earn before deductions and adjustments.
- Taxable income is your gross income minus certain deductions and exemptions allowed by the IRS. These deductions and exemptions can significantly lower your tax bill.
Marginal Tax Rate:
- The tax rate listed in each bracket applies only to the income earned within that bracket.
Standard Deduction:
- The standard deduction is a dollar amount you can subtract from your taxable income, regardless of your actual expenses. The standard deduction amounts for 2024 are:
- Single and Married Filing Separately: $14,600
- Married Filing Jointly: $29,200
- Head of Household: $21,900
Tax Withholding:
- Throughout the year, your employer withholds a portion of your income for federal income taxes.This withholding helps ensure you pay your taxes throughout the year and avoid a large tax bill at filing time.
Tax Credits:
- Tax credits are dollar-for-dollar reductions in your tax liability. Unlike deductions, which reduce your taxable income, tax credits directly reduce the amount of tax you owe.
- Some common tax credits include the Earned Income Tax Credit (EITC) and the Child Tax Credit.
New Tax & Benefit Changes for 2024 (Tax Returns Filed in 2025)
This table summarises some of the key tax and benefit changes impacting taxpayers filing for tax year 2024 (returns submitted in 2025).
| Change Category | Description |
| Standard Deduction | Increased for all filing statuses:
|
| Marginal Tax Rates | Remain the same, with the top rate at 37% for high earners. |
| Alternative Minimum Tax (AMT) Exemption | Increased to $85,700 (up from $81,300) with a phase-out starting at $609,350 (unchanged). |
| Earned Income Tax Credit (EITC) | Maximum amount increased for qualifying taxpayers with 3+ children: $7,830 (up from $7,430). |
| Transportation & Parking Fringe Benefits | Monthly limits increased to $315 (up from $300) for both qualified transportation and parking. |
| Health Flexible Spending Account (FSA) | Increased contribution limit to $3,200 (up from $2,850). Maximum carryover amount for unused funds is $640 (up from $610). |
| Medical Savings Account (MSA) Deductible & Out-of-Pocket Limits | Increased for both self-only and family coverage plans. Refer to full text for specific figures. |
| Foreign Earned Income Exclusion | Increased to $126,500 (up from $120,000). |
| Estate Tax Exclusion | Increased to $13,610,000 (up from $12,920,000). |
| Gift Tax Annual Exclusion | Increased to $18,000 (up from $17,000). |
| Adoption Credit | Maximum credit amount increased to $16,810 (up from $15,950). |