2024 Tax Brackets

Income Tax Brackets and Rates

The 2024 income ceiling for all listed tax brackets and for all filers, adjusted for inflation are listed below. The Seven federal income tax rates for 2024 are... 10% - 12% - 22% - 24% - 32% - 35% - 37% (no changes from 2023). The marginal income tax rate of 37% will apply to taxpayers with taxable income above $609,350 (single filers), and $731,200 is the target for married couples filing jointly...(SEE Table 1)

Table 1. Tax Brackets and Rates, 2024 (Source: IRS)

Standard Deduction & Personal Exemption

2024 has standard deductions for single filers increasing by $750; $1500 for married couples filing jointly. Seniors over the age of 65 are eligible to claim an additional standard deduction of $1,950 for single filers and $1,550 for joint filers. Personal exemptions for 2024 remains at ZERO (this is due to the personal exemption from the Tax Cuts and Jobs Act 2017 )

Table 2. 2024 Standard Deduction and Personal Exemption (Source: IRS)

Alternative Minimum Tax

Created in the 1960s, The Alternative Minimum Tax (AMT) was setup to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. More information can be found at IRS.Gov (SEE Table 3).

Table 3. 2024 Alternative Minimum Tax Exemptions (Source:IRS)

2024 keeps the AMT rate at 28%. This rate applies to excess AMTI of $232,600 for all taxpayers ($116,300 for married couples who file separate returns).

The AMT exemptions phase out at 25 cents per dollar earned once a taxpayers AMTI hits a certain threshold. In 2024, the exemption will start phasing out at $609,350 in AMTI for single filers and $1,218,700 for married taxpayers filing jointly (SEE Table 4).

Table 4. 2024 Alternative Minimum Tax Exemption Phaseout Thresholds

Earned Income Tax Credit

The 2024 Maximum Earned Income Tax Credit (EITC) for single and joint filers is $632 (no children) (SEE Table 5). The maximum credit is $4,213 for one child, $6,960 for two children, and $7,830 for three or more children.

Table 5. 2024 Earned Income Tax Credit Parameters

Qualified Business Income Deduction

Within the Tax Cuts and Jobs Act, there is an inclusion of a 20% deduction in 2024 for pass-through businesses with $191,950 of qualified business income for single taxpayers and $383,900 for married taxpayers filing jointly (SEE Table 6).

Table 6. 2024 Qualified Business Income Deduction Thresholds (Source:IRS)

Child Tax Credit

The maximum Child Tax Credit for 2024 is $2,000 per child who qualifies, with no adjustments for inflation. The amount that may be refunded for the Child Tax Credit is adjusted for inflation and increases from $1,600 to $1,700 in 2024.

2024 Annual Exclusion for Gifts

For 2024, the first $18,000 of gifts to any person is excluded from tax. Exclusions are increased to $185,000 from $175,000 for gifts to spouses who're not citizens of the United States.

2024 Capital Gains Tax Rates & Brackets (Long-term Capital Gains)

Capital Gains, long term, are taxed using different rates and brackets compared to standard income.

Table 7. 2024 Capital Gains Tax Rates & Brackets (Source:IRS)

2023 Tax Brackets

Income Tax Brackets and Rates

The 2023 income ceiling for all listed tax brackets and for all filers, adjusted for inflation are listed below. The Seven federal income tax rates for 2023 are... 10% - 12% - 22% - 24% - 32% - 35% - 37% The marginal income tax rate of 37% will apply to taxpayers with taxable income above $539,900 (single filers), and $693,750 is the target for married couples filing jointly...(SEE Table 1)

Table 1. Tax Brackets and Rates, 2023 (Source: IRS)

Standard Deduction and Personal Exemption

2023 has standard deductions for single filers increasing by $900; $1800 for married couples filing jointly. Personal exemptions for 2023 remains at ZERO (this is due to the personal exemption from the Tax Cuts and Jobs Act 2017 )

Table 2. 2023 Standard Deduction and Personal Exemption (Source: IRS)

Alternative Minimum Tax

Created in the 1960s, The Alternative Minimum Tax (AMT) was setup to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two. More information can be found at IRS.Gov (SEE Table 3).

Table 3. 2023 Alternative Minimum Tax Exemptions (Source:IRS)

2023 still sees the AMT rate at 28%. This rate applies to excess AMTI of $220,700 for all taxpayers ($110,350 for married couples who file separate returns).

The AMT exemptions phase out at 25 cents per dollar earned once a taxpayers AMTI hits a certain threshold. In 2023, the exemption will start phasing out at $578,150 in AMTI for single filers and $1,156,300 for married taxpayers filing jointly (SEE Table 4).

Table 4. 2023 Alternative Minimum Tax Exemption Phaseout Thresholds

Earned Income Tax Credit

The 2023 Maximum Earned Income Tax Credit (EITC) for single and joint filers is $560 (no children) (SEE Table 5). The maximum credit is $3,995 for one child, $6,604 for two children, and $7,430 for three or more children. Increases are nominal.

Table 5. 2023 Earned Income Tax Credit Parameters

Qualified Business Income Deduction

Within the Tax Cuts and Jobs Act, there is an inclusion of a 20 percent deduction in 2023 for pass-through businesses with $182,100 of qualified business income for single taxpayers and $364,200 for married taxpayers filing jointly (SEE Table 6).

Table 6. 2023 Qualified Business Income Deduction Thresholds (Source:IRS)

Child Tax Credit

The maximum Child Tax Credit for 2023 is $2,000 per child who qualifies, with no adjustments for inflation. The amount that may be refunded for the Child Tax Credit is adjusted for inflation and increases from $1,500 to $1,600 in 2023.

2023 Annual Exclusion for Gifts

For 2023, the first $17,000 of gifts to any person is excluded from tax. Exclusions are increased to $175,000 from $164,000 in 2023 for gifts to spouses who are not citizens of the United States.

2023 Capital Gains Tax Rates & Brackets (Long-term Capital Gains)

Capital Gains, long term, are taxed using different rates and brackets compared to standard income.

Table 7. 2023 Capital Gains Tax Rates & Brackets (Source:IRS)