The 2024 tax thresholds, brackets, and rates you’ll use to file your taxes during the 2025 tax season have just been released. Here’s how they panned out:
About 90% of taxpayers claim the standard deduction when tax time rolls around. For tax year 2024, the standard deduction for married couples filing jointly rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024; for heads of households, the standard deduction will be $21,900 for tax year 2024.
You may choose to itemize, however, either because the total amount of your allowable itemized deductions surpasses the standard limit or you’re restricted to itemizing for a specific reason. In these cases, note that there remains no limitation on itemized deductions in 2024 (as part of the Tax Cuts and Jobs Act).
Marginal rates for taxable years beginning in 2024 for married individuals filing joint returns and surviving spouses are:
| If Taxable Income Is: | The Tax Is: |
| Not over $23,200 | 10% of the taxable income |
| Over $23,200 but not over $94,300 | $2,320 plus 12% of the excess over $23,200 |
| Over $94,300 but not over $201,050 | $10,852 plus 22% of the excess over $94,300 |
| Over $201,050 but not over $383,900 | $34,337 plus 24% of the excess over $201,050 |
| Over $383,900 but not over $487,450 | $78,221 plus 32% of the excess over $383,900 |
| Over $487,450 but not over $731,200 | $111,357 plus 35% of the excess over $487,450 |
| Over $731,200 | $196,669.50 plus 37% of the excess over $731,200 |
Refer to tables 2-5 in this IRS bulletin for head of household, unmarried, married filing separately, and estate and trust filers.
Other notable updates for taxable years beginning in 2024:
- The Alternative Minimum Tax exemption amount is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700).
- The monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315.
- The dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
- The foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
- Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, an increase from $12,920,000 in 2023.
- The annual exclusion for gifts increases to $18,000.
- The capital gains thresholds have been adjusted up for inflation (which means it takes more income to reach the 15% or 20% brackets).
Not changing in 2024 is the personal exemption, which remains at zero since the exemption was eliminated by a provision in the Tax Cuts and Jobs Act.
Business and property owners should pay special attention to adjustments in certain tax areas, including Section 179 depreciation, qualified business income, energy-efficient commercial building deductions, and more. As always, never assume what you paid in the past is what’s due now. These changes and any changes in your personal or business financial snapshots can alter your tax bill. Feel free to contact us with questions.
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