Key 2024 inflation-adjusted tax amounts for individuals

The IRS recently announced various 2024 inflationadjusted federal tax amounts that affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government. Standard deduction Here are the inflationadjusted standard deduction numbers for 2024 for those who don’t itemize:
Older taxpayers and those who are blind are entitled to additional standard deduction allowances. In 2024 for those age 65 or older or blind, the amounts will be: $1,550 for a married taxpayer (up from $1,500 in 2023) and $1,950 for a single filer or head of household (up from $1,850 for 2023). For an individual who can be claimed as a dependent on another taxpayer’s return, the 2024 standard deduction will be the greater of: 1) $1,300 (up from $1,250 for 2023) or 2) $450 (up from $400 for 2023) plus the individual’s earned income, not to exceed $14,600 (up from $13,850 for 2023). Ordinary income and shortterm capital gains Here are the 2024 inflationadjusted bracket thresholds for ordinary income and net shortterm capital gains:
Longterm capital gains and dividends Here are the 2024 inflationadjusted bracket thresholds for net longterm capital gains and qualified dividends:
Gift and estate tax The annual exclusion for gifts made in 2024 will be $18,000 (up from $17,000 for 2023). That means you can give away up to $18,000 to as many individuals as you wish without incurring gift tax or using up any of your unified federal gift and estate tax exemption. In 2024, the unified federal gift and estate tax exemption will be $13,610,000 (up from $12,920,000 for 2023). For gifts made in 2024, the annual exclusion for gifts to a noncitizen spouse will be $185,000 (up from $175,000 in 2023). Conclusion This article only covers some of the inflationadjusted tax amounts. There are others that may potentially apply, including: alternative minimum tax parameters, kiddie tax amounts, limits on the refundable amount of the Child Tax Credit, limits on the adoption credit, IRA contribution amounts, contributions to your company’s retirement plan and health savings account amounts. Various other inflationadjusted amounts may affect your tax situation if you own an interest in a sole proprietorship or a passthrough business. Contact us with questions. © 2023 |