The IRS on Thursday announced higher federal income tax brackets and standard deductions for 2024.
The agency has boosted the income thresholds for each bracket, applying to tax year 2024 for returns filed in 2025. For 2024, the top rate of 37% applies to individuals with taxable income above $609,350 and married couples filing jointly earning $731,200.
Federal income brackets show how much you’ll owe on each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Higher standard deduction
The standard deduction will also increase in 2024, rising to $29,200 for married couples filing jointly, up from $27,700 in 2023. Single filers may claim $14,600, an increase from $13,850.
Adjustments for other tax provisions
The IRS also boosted figures for dozens of other provisions, such as the alternative minimum tax, a parallel system for higher earners and the estate tax exemption for wealthy families.
There’s also a higher earned income tax credit, bumping the write-off to a maximum of $7,830 for low- to moderate-income filers. And employees can funnel $3,200 into health flexible spending accounts.
More from CNBC:
Biden tries to erase student debt in conflict with Supreme CourtExperts see ‘inevitable’ slowing in credit card spending 3 risks to beware of as economy heads for soft landing
This post appeared first on NBC NEWS
