There’s More to Celebrate as We Head Into the Holidays – IRS Announces Changes!

Planning Article

November 2023 – By Tom Rueger, J.D., CFP®

As we head into the 2023 holiday season there is now one more thing to celebrate this year…wait for it…the new 2024 tax brackets are here! Does it get any better than that??? Hopefully, it does get better than that and, if not, you should start working on your New Year’s resolutions! All joking aside, the IRS has announced what the income tax brackets and standard deductions will be for the 2024 tax year (taxes filed in 2025).

The tax rates for tax year 2024 are:

  • 37% for single taxpayers with incomes over $609,350 ($731,200 for married couples filing jointly)
    35% for single taxpayers with incomes over $243,725 ($487,450 for married couples filing jointly)
  • 32% for single taxpayers with incomes over $191,950 ($383,900 for married couples filing jointly)
  • 24% for single taxpayers with incomes over $100,525 ($201,050 for married couples filing jointly)
  • 22% for single taxpayers with incomes over $47,150 ($94,300 for married couples filing jointly)
  • 12% for single taxpayers with incomes over $11,600 ($23,200 for married couples filing jointly)
  • 10% for single taxpayers with incomes of $11,600 or less ($23,200 for married couples filing jointly)

The standard deduction for married couples filing jointly for tax year 2024 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, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.

The annual exclusion for gifts to individuals increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.

For 2024, the additional standard deduction amount for the aged (65 or older) or the blind is $1,550. The additional standard deduction amount increases to $1,950 for unmarried taxpayers.

Capital Gains rates will not change for 2024, but the brackets for the rates will change. Most taxpayers pay a maximum 15% rate, but a 20% tax rate applies if your taxable income exceeds the thresholds set for the 37% ordinary tax rate.

If you would like to know more about tax updates or tax planning, please contact your Wealth Advisor for assistance.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Although general strategies and/or opinions are revealed, this post is not intended to, nor does it represent or reflect, transactions or activity specific to any one account. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All data and information are gathered from sources believed to be reliable and is not warranted to be correct, complete, or accurate.

Investments carry risk of loss including loss of principal. Past performance is never a guarantee of future results. Vantage Financial Partners Limited is not a tax advisor.  Please consult a tax professional for any specific questions regarding your tax situation.