What are the 2024 Tax Rates and Deductions?
Individual Tax Rate
Tax-bracket thresholds increase for each filing status but, because they’re based on percentages, they increase more significantly for the higher brackets.
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2024 Ordinary-Income Tax Brackets
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Tax Rate
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Single
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Head of Household
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Married Filing Jointly or Surviving Spouse
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Married Filing Separately
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10%
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$0 - $11,600
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$0 - $16,550
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$0 - $23,200
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$0 - $11,600
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12%
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$11,601 - $47,150
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$16,551 - $63,100
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$23,201 - $94,300
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$11,601 - $47,150
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22%
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$47,151 - $100,525
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$63,101 - $100,500
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$94,301 - $201,050
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$47,151 - $100,525
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24%
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$100,526 - $191,950
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$100,501 - $191,950
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$201,051 - $383,900
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$100,526 - $191,950
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32%
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$191,951 - $243,725
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$191,951 - $243,700
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$383,901 - $487,450
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$191,951 - $243,725
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35%
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$243,726 - $609,350
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$243,701 - $609,350
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$487,451 - $731,200
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$243,726 - $365,600
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37%
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Over $609,350
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Over $609,350
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Over $731,200
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Over $365,600
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Standard Deduction
- Single: $14,600
- Head of Household: $21,900
- Married Filing Jointly or Surviving Spouse: $29,200
- Married Filing Separately: $14,600
Alternative Minimum Tax (AMT)
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2024 AMT Brackets
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Tax Rate
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Single
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Head of Household
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Married Filing Jointly or Surviving Spouse
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Married Filing Separately
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26%
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$0 - $232,600
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$0 - $232,600
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$0 - $232,600
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$0 - $116,300
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28%
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Over $232,600
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Over $232,600
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Over $232,600
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Over $116,300
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- The AMT exemption are also indexed for 2024:
- Single or Head of Household: $85,700
- Married Filing Jointly: $133,300
- Married Filing Separately: $66,650
- AMT Exemption Phaseouts Based on AMT Income:
- Single or Head of Household: $609,350 - $952,150
- Married Filing Jointly: $1,218,700 - $1,751,900
- Married Filing Separately: $609,350 - $875,950
Estate and Gift Tax Exemption
The lifetime exemption is $13,610,000 with a top tax rate of 40%. A surviving spouse may be able to use the deceased spouse’s unused estate tax exemption. The annual gift tax exclusion is $18,000 per recipient ($36,000 if spouses elect "split-gift" treatment).
Education and Child-Related Breaks
- The American Opportunity Credit: Maximum credit per eligible student is $2,500 and is phased out for taxpayers with adjusted gross income in the following ranges:
- Single/Head of Household: $80,000 - $90,000
- Married Filing Jointly: $160,000 - $180,000
- The Lifetime Learning Credit: Maximum credit is $2,000 per tax return and is phased out for taxpayers with adjusted gross income in the following ranges:
- Single/Head of Household: $80,000 - $90,000
- Married Filing Jointly: $160,000 - $180,000
- Student Loan Interest Deduction: Maximum credit is $2,500 per tax return and is phased out for taxpayers with adjusted gross income in the following ranges:
- Single/Head of Household: $80,000 - $95,000
- Married Filing Jointly: $165,000 - $195,000
FICA Rates and Additional Medicare Tax
The rate for the employee portion of Social Security tax is 6.2%, and the maximum earned income it applies to is $168,600, while the Medicare rate is 1.45% and applies to all earned income.
Self-employed individuals pay both the employee and employer portions, but get a deduction for the employer portion.
Cash wages totaling $2,700 or more to a household employee are also subject to FICA taxes.
An additional 0.9% Medicare tax applies to FICA wages and self-employment income exceeding $200,000 (singles and heads of households), $250,000 (joint filers) or $125,000 (separate filers).
Employers must withhold the additional Medicare tax beginning in the pay period when wages exceed $200,000 for the calendar year, without regard to an employee’s filing status.
Retirement Savings Changes for 2024
The IRS recently announced cost-of-living adjustments that apply to the dollar limitations for pensions, as well as other qualified retirement plans for 2024. The amounts increased more than they have in recent years due to inflation.
401(k) Plans
The 2024 contribution limit for employees who participate in 401(k) plans will increase to $23,000 (up from $22,500 in 2023). This contribution amount also applies to 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan.
The catch-up contribution limit for employees age 50 and over who participate in 401(k) plans and the other plans mentioned above will remain at $7,500.
SEP Plans and Defined Contribution Plans
The limitation for defined contribution plans, including a Simplified Employee Pension (SEP) plan, will increase from $66,000 to $69,000. To participate in a SEP, an eligible employee must receive at least a certain amount of compensation for the year.
SIMPLE Plans
Limit on Contributions to SIMPLE Plans: $16,000
Limit on Catch-Up Contributions to SIMPLE Plans: $3,500
Other Plan Limits
The IRS also announced that in 2024:
- The limitation on the annual benefit under a defined benefit plan will increase from $265,000 to $275,000. For a participant who separated from service before January 1, 2024, the participant’s limitation under a defined benefit plan is computed by multiplying the participant’s compensation limitation, as adjusted through 2023, by 1.0351.
- The limitation used in the definition of “highly compensated employee” will increase from $150,000 to $155,000.
IRA Contributions
The 2024 limit on annual contributions to an individual IRA will increase to $7,000 (up from $6,500 for 2023). The IRA catch-up contribution limit for individuals age 50 and older isn’t subject to an annual cost-of-living adjustment and will remain $1,000.
Click the image above for the 2024 - 2025 Tax Planning eGuide
