Income Tax Brackets
The 2024 income tax brackets have been adjusted for inflation. Below are the new rates:
- 37%: Applies to single filers with incomes over $609,350, or $731,200 for married couples filing jointly.
- 35%: Applies to single filers with incomes over $243,725, or $487,450 for married couples filing jointly.
- 32%: Applies to single filers with incomes over $191,950, or $383,900 for married couples filing jointly.
- 22%: Applies to single filers with incomes over $47,150, or $94,300 for married couples filing jointly.
- 12%: Applies to single filers with incomes over $11,600, or $23,200 for married couples filing jointly.
Standard Deduction
The standard deduction has increased for 2024:
- Married couples filing jointly: $29,200
- Single taxpayers and married individuals filing separately: $14,600
- Heads of households: $21,900
Retirement Contribution Limits
Take advantage of the higher limits to maximize your retirement savings:
- The 401(k) plan contribution limit is now $23,000, an increase of $500 from 2023.
Gift Tax Exclusion
The gift tax exclusion remains at $15,000 per recipient, allowing individuals to give tax-free gifts up to this amount.
Saver’s Credit
The Saver’s Credit, designed to encourage retirement savings among low- and middle-income filers, remains available in 2024. If you qualify, this tax credit can significantly reduce your tax liability while helping you build a secure retirement.
Key Takeaways:
- The updates to tax brackets and deductions highlight the importance of reviewing your tax strategy annually.
- Increased contribution limits provide an opportunity to boost retirement savings.
- Staying informed about tax credits and exclusions can help you take full advantage of available benefits.
At Boston Financial Advisory Group, we’re here to guide you through these changes. Contact us to ensure you’re fully prepared for the 2024 tax season and positioned for financial success.