How much do you have to pay? The new IRS tax brackets for 2024

The government agency announced the new tax brackets on federal income tax and standard deductions.

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Published by

26 de diciembre, 2023

Topics:

IRS
Taxes

Starting in January 2024, the Internal Revenue Service (IRS) will update the tax brackets for federal income tax and standard deductions, directly impacting Americans' pockets. For next year, the government agency announced higher limits to avoid a phenomenon known as "level creep," which occurs when taxpayers fall into higher taxes, even though their purchasing power remains in the same place.

The IRS usually updates the tax brackets annually, defined by Economipedia as the "percentage or coefficient that indicates the amount of a tax that a taxpayer must pay to the State." In times of high inflation, the increases are more significant precisely to try to ensure that it has as little impact as possible on individual and family economies. By 2024, these will increase by 5.4%.

In addition to standard deductions and federal income taxes, these thresholds for the amount of the earned income tax credit were increased. Families are now eligible to receive $7,830 if they have three or more qualifying children, up from $7,430 in 2023. In turn, employees will be able to contribute more to their flexible health spending accounts, with the maximum contribution increasing to between $150 and $3,200.

Standard deductions

According to the agency's website, "The standard deduction is a specific dollar amount that reduces the amount of income on which you're taxed. Your standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and/or blindness."

For married couples, it will increase to $29,200, up from $27,700, while individual filers will have a new maximum of $14,600 by 2024, up from $13,850.