Tax Code Changes for 2024: IRS Announces 2024 Adjustments

The Internal Revenue Service (IRS) is set to roll out a wave of adjustments for the upcoming 2024 tax year, presenting modifications to over 60 tax provisions as outlined in Revenue Procedure 2023-34. These changes are poised to leave a lasting impact on tax returns filed in 2025, introducing a series of alterations across various facets of the tax code.

One standout adjustment in this roster is the standard deduction for married couples filing jointly in the 2024 tax year. The figure experiences a substantial uptick, reaching $29,200—an increase of $1,500 from the preceding tax year. Meanwhile, single taxpayers and those married but filing separately can anticipate their standard deduction climbing to $14,600, reflecting a $750 augmentation from the 2023 baseline. Heads of households will also see a rise in their standard deduction, reaching $21,900—an increase of $1,100 from the previous tax year.

Staying consistent, the top tax rate for individual single taxpayers remains at 37%, applicable to incomes exceeding $609,350 ($731,200 for married couples filing jointly). Other tax brackets for the 2024 tax year include:

35% for incomes surpassing $243,725 ($487,450 for married couples filing jointly)
32% for incomes exceeding $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 beyond $47,150 ($94,300 for married couples filing jointly)
12% rate for incomes surpassing $11,600 ($23,200 for married couples filing jointly)
10% for single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly)

Additional adjustments encompass an Alternative Minimum Tax exemption amount of $85,700 for 2024, with the phase-out commencing at $609,350. The basic exclusion amount for the estates of decedents in 2024 rises to $13,610,000, a notable increase from the $12,920,000 in 2023.

Furthermore, the annual exclusion for gifts experiences an upward adjustment to $18,000 for the calendar year 2024, signaling an increase from the $17,000 limit in 2023. Lastly, the maximum credit for adoptions in the tax year 2024 has been fine-tuned to cover qualified adoption expenses up to $16,810, up from $15,950 in 2023. These modifications underscore the ever-evolving nature of the tax landscape, indicative of the IRS’s commitment to adapting to economic conditions and meeting the diverse needs of taxpayers.

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Tax Code Changes for 2024: IRS Announces 2024 Adjustments

Tax Code Changes for 2024: IRS Announces 2024 Adjustments

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About the Author: Mark Roberts