The Internal Revenue Service (IRS) announced its annual inflation adjustments to federal tax brackets on Thursday, increasing both the marginal tax rates and the standard amount Americans can deduct for the 2024 tax year.
This means taxpayers will need to earn more to be in higher tax brackets which have higher tax rates.
For the 2024 tax year, the IRS said the top tax rate remains 37% for single taxpayers with incomes greater than $609,350 and $731,200 for married couples filing jointly, up from thresholds of $578,125 and $693,750, respectively, for the 2023 tax year.
The other marginal tax rates for 2024 are:
- 10% for incomes of $11,600 or less ($23,200 for married couples filing jointly)
- 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
- 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
- 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
- 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
- 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
In addition, the standard deduction - a specific dollar amount that reduces the amount of income tax a person pays if they do not itemize their deductions - for married couples filing jointly has risen $1,500 over 2023 to $29,200.
Single taxpayers and married individuals filing separately will see their standard deduction increase by $750 year over year to $14,600.
For the heads of households, the standard deduction has increased by $1,100 to $21,900.
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