2024 Tax Brackets, Social Security Benefits Increase, and Other Inflation Adjustments
The IRS and Social Security Administration recently announced changes for 2024. Here are some highlights:
- The SSA has announced that benefit checks will rise 3.2% in 2024. Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount. The fastest way to find out your new benefit amount is to access your personal mySocial Security account to view the COLA notice online.
- The maximum amount of earnings subject to Social Security tax (taxable maximum) will increase to $168,600 from $160,200.
- The individual tax brackets for ordinary income have been adjusted by inflation (Table 1):
- The standard deduction (used instead of itemized deductions) will increase by $750 for single filers and $1500 for joint filers (Table 2). Seniors over age 65 may claim an additional standard deduction of $1,950 for single filers and $1,550 for joint filers.
- The personal exemption for 2024 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA))
- Long-term capital gains rates and brackets:
- The maximum child tax credit is still $2,000 per qualifying child and was not adjusted for inflation.
- The retirement plan contribution limit for employees who participate in a 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $23,000 (an increase of $500 from 2023) $30,500 for those aged 50 and over (which includes an unchanged $7,000 catch up contribution limit)
- The limit on annual contributions to an IRA will increase to $7,000, up from $6,500. The IRA catch-up limit remains at $1,000.
- The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $146,000 and $153,000 for singles and heads of households. For married couples filing jointly, the income phase-out range is between $230,000-$240,000. DETAILS HERE.
- The annual maximum Health Savings Account (HSA) contribution limits for 2024 will be $4,150 for self-only coverage and $8,300 for family coverage.
- In 2024, eligible employees may contribute up to $3,200 to a FSA (Flexible Spending Account).
- Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000 up from a total of $12,920,000 for estates of decedents who died in 2023.
- The annual exclusion for gifts increases to $18,000 for the calendar year 2024, up from $17,000 for the calendar year 2023.
- The standard mileage rates for 2024 is $0.67 per mile, up 1.5 cents from 2023.
More Information
- If you would like to read more about the 2024 changes from the IRS here is the IRS Publication and summary at the Tax Foundation website.
- For help estimating your taxes or withholding:
