What are The Changes YOU NEED to Know
By Mrs. B Finesse, M.S.
Did you know that the IRS has introduced new income tax brackets for the year 2024? These brackets determine the tax rates workers will pay based on their income. The changes are made to account for inflation and ensure fairness in the tax system.
Workers with lower incomes will fall into lower tax brackets and pay a smaller percentage of their income in taxes. Those with higher incomes will fall into higher tax brackets and pay a higher percentage of their income in taxes.
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).
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).
What is NOT Changing
- The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
- For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
- The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
It’s important for workers to understand their tax bracket and how it affects their take-home pay. Being aware of the new tax brackets can help workers plan their finances and make informed decisions.
Seeking assistance from tax professionals or utilizing resources can provide further guidance on navigating the new income tax brackets.
Staying informed about tax changes and maintaining accurate records can simplify the tax filing process and potentially maximize deductions. It’s crucial to keep track of any updates or changes to the tax brackets in order to stay compliant with tax laws.
Embrace the Millennial Finesse Mindset by being a proactive planner, taking control of your finances, and watching your savings grow steadily towards a brighter future with more money. Focus on Faithfully Innovating, Inspiring others, being Naturally Effective, and Seek Success Everyday!
Take action now by leaving a comment below and discussing if the new IRS tax brackets have affected your household?
Note: For more detailed information and specific tax advice, should refer to the IRS original article and consult with a qualified tax professional.