IRS Announces Tax Rates for 2024: How Much You'll Have to Pay

On November 9, the Internal Revenue Service (IRS) announced it was raising tax rate thresholds and the standard amount Americans can deduct from their taxes. Writes about this CNBC.

Photo: IStock

These changes are two of several adjustments based on rising inflation. They mean taxpayers will have to earn more money to qualify for the higher income thresholds and corresponding higher rates in the 2024 tax year.

For example, the top rate of 37% would apply to individuals with annual taxable income above $609 or to married couples earning more than $350. This is an increase from the 731 thresholds of $200 and $2023, respectively.

On the subject: The IRS is asking all US taxpayers to urgently check one thing regarding their finances.

The standard deduction (a set amount by which you can reduce taxable income if you don't itemize it) will increase to $14 for single taxpayers in 600, up from $2024 in 13. The deduction for married couples filing joint returns will increase from $850 to $2023.

Here's what the new thresholds will look like for single taxpayers and married couples filing joint returns.

Individual taxpayers:

• from $0 to $11 - 600% of taxable income;
• from $11 to $601 — $1 + 160% of the amount exceeding $12;
• from $47 to $151 – $100 + 525% of the amount exceeding $5;
• from $100 to $526 – $191 + 950% of the amount exceeding $17;
• from $191 to $951 – $243 + 725% of the amount exceeding $39;
• from $243 to $726 – $609 + 350% of the amount exceeding $55;
• from $609 and more - $351 + 183% of the amount exceeding $647,25.

Couples filing joint returns:

• from $0 to $23 - 200% of taxable income;
• from $23 to $201 – $94 + 300% of the amount exceeding $2;
• from $94 to $301 – $201 + 050% of the amount exceeding $10;
• from $201 to $051 – $383 + 900% of the amount exceeding $34;
• from $383 to $901 – $487 + 450% of the amount exceeding $78;
• from $487 to $451 – $731 + 200% of the amount exceeding $111;
• from $731 and more - $201 + 196% of the amount exceeding $669,50.

When reading news about tax changes, there are a few things you should always keep in mind.

We're talking about marginal tax rates.

The above data should serve as a reminder that the United States uses graduated tax rates. This means that the percentage you see in a certain category does not apply to your entire income. Instead, each portion of your taxable income, calculated by subtracting the standard or itemized deduction from your gross income, is taxed in installments as you move up the income ladder.

This means that in 2024 you'll pay 10% on the first $23, then 200% on $12 - $23, and so on. This means that in 201 you'll pay 94% on the first $300 you earn, then 2024% from $10 to $23, and then the higher your income, the higher the interest rate.

Understand your tax years

Tax years can be confusing. The changes, announced Nov. 9, apply to the 2024 tax year, for which returns are due in April 2025.

The 2023 tax year will end at the end of the year, and you will have until April 15, 2024 to file your return.

Pay attention to changes that affect you

Tax thresholds and the standard deduction aren't the only IRS regulations that change with inflation. There are a number of other changes that may or may not apply to your specific financial situation.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York

High-income individuals may want to pay attention to increases in the alternative minimum tax (a shorthand for high-income companies) and property tax exemption thresholds.

Low- and moderate-income earners will receive a larger Earned Income Tax Credit, capping at $2024 in 7830, up from $7430 in 2023.

And if you're still in the process of signing up for health insurance next year, note that the maximum health insurance flexible spending account contribution will increase to $2024 in 3200, up $150 from this year.

Read also on ForumDaily:

Residents of which countries drink the most: the ranking will surprise you

Top 20 countries in the world with the best roads

The IRS is asking all US taxpayers to urgently check one thing regarding their finances.

15 places for a romantic weekend in America

Five natural phenomena that can overtake you in flight

Grand Canyon Walking Guide: Best Tours, Trails & Tips

6 things unusual for our immigrants that are in every American home

10 reasons for refusing a US visa: what to do next

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.