The IRS has just revealed important updates for the 2024 tax season that everyone should know about. Tax brackets, deductions, and credits all have changes that could affect how much money you need to pay or how much you’ll get back. So, let’s break it down in a way that’s easy to understand!
What are the tax brackets for tax years 2024 and 2025?
The tax brackets for this year are designed to help determine how much tax you owe based on your income. For 2024, there are seven tax brackets, with rates ranging from 10% to 37%. Here’s how they look:
| Income Range | Tax Rate |
|---|---|
| $0 – $11,000 | 10% |
| $11,001 – $44,725 | 12% |
| $44,726 – $95,375 | 22% |
| $95,376 – $182,100 | 24% |
| $182,101 – $231,250 | 32% |
| $231,251 – $578,125 | 35% |
| Over $578,125 | 37% |
What to know ahead of filing season
With tax season just around the corner, it’s good to be prepared! Make sure you understand these changes because they could impact how you file your taxes. For 2024, married couples filing jointly will see their standard deduction increase to $29,200, while single filers will have a standard deduction of $14,600.
IRS tax rates for tax year 2024
The IRS has adjusted the tax rates to accommodate inflation. These updates reflect that cost, which means certain tax credits and deductions have also changed. Adjusted rates ensure that taxpayers aren’t paying more due to inflation. This is great news as it helps keep more money in our pockets!
Tax exemptions and credits
Tax exemptions and credits are important because they can help reduce the amount of tax you owe. For 2024, the alternative minimum tax (AMT) exemption is set at $85,700 for single filers. For married couples filing together, it’s $133,300. Additionally, the maximum Earned Income Tax Credit for a family with three or more children will be $7,830!
What about my health savings account contributions?
If you’re saving for healthcare expenses, you’ll be glad to know that the Health Savings Account (HSA) contribution limit has also increased to $3,200 for individuals. And if you’re considering family coverage, the medical out-of-pocket maximums are $5,550 for individuals and $10,200 for families.【1†source】
Are tax brackets changing for tax year 2025?
Looking ahead, tax brackets and deductions are expected to change again in 2025. While we don’t have all the details yet, it’s useful to keep an eye out for those updates that might impact your future tax returns. Planning ahead can help you optimize your tax situation!
As tax season gets closer, remember, knowing the 2024 tax brackets and deductions can help you feel more confident when it’s time to file your taxes. Preparation is key, so make sure to mark your calendar for important dates and gather all your documents early!
