IRS Announces Tax Inflation Adjustments for 2024

The Internal Revenue Service announced inflation adjustments on Thursday for more than 60 tax provisions for tax year 2024.

Revenue Procedure 2023-34 sets out the tax year 2024 adjustments, which generally apply to tax returns filed in 2025.

The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023.

For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023. For heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly). The other rates are:

• 35% for incomes over $243,725 ($487,450 for married couples filing jointly).
• 32% for incomes over $191,950 ($383,900 for married couples filing jointly).
• 24% for incomes over $100,525 ($201,050 for married couples filing jointly).
• 22% for incomes over $47,150 ($94,300 for married couples filing jointly).
• 12% for incomes over $11,600 ($23,200 for married couples filing jointly).

The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).

The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350. This amount is $133,300 for married couples filing jointly, for whom the exemption begins to phase out at $1,218,700.

For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).

The estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.

The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.

Also, the maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.

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