The IRS on Thursday announced the new income limits for the different tax brackets as still-high inflation continues to squeeze Americans financially.
The IRS on Thursday announced higher inflation adjustments for the 2024 tax year , potentially giving Americans a chance to increase their take-home pay next year. The higher limits for the federal income tax bracket and standard deductions are intended to avoid a phenomenon known as " bracket creep ," which happens when taxpayers are pushed into higher-income brackets even though their purchasing power is essentially unchanged due to high inflation.
The standard deduction, which reduces the amount of income you must pay taxes on, is claimed by a majority of taxpayers. It will rise to $29,200, up from $27,700 in 2024 for married couples filing jointly, amounting to a 5.4% bump. For individuals, the new maximum will be $14,600 for 2024, up from $13,850, the IRS said. Heads of households will see their standard deduction jump to $21,900 in 2024, up from $20,800. The IRS is increasing the tax brackets by about 5.
IRS Inflation Adjustments 2024 Tax Year Take-Home Pay Federal Income Tax Bracket Standard Deductions Bracket Creep High Inflation Taxpayers
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Billionaire Ken Griffin predicts higher inflation rates due to de-globalizationVivien Lou Chen is a Markets Reporter for MarketWatch. You can follow her on Twitter vivienlouchen.
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