The Internal Revenue Service recently announced the annual inflation adjustments for the tax year 2024.
The following are the most relevant to our clients at Wollman, Gehrke & Associates, P.A.
Standard Deduction: For married couples filing jointly for tax year 2024 rises to $29,200. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600, and for heads of households, the standard deduction will be $21,900.
Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).
The other rates are:
35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)
The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
AMT (Alternative Minimum Tax) exemption amount for the tax year 2024 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).
Foreign earned income exclusion is $126,500, increased from $120,000.
Estate Exclusion Amount: 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.
Annual Gift Tax Exclusion increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
The changes also included updates to participants of Medical Savings Accounts, Adoption Expenses, Earned income tax credits, and a list of items unaffected by indexing. To see the full report, click here. To schedule a consultation with a Wollman, Gehrke & Associates attorney, click here.