On Thursday, the IRS released its annual adjustments for the 2024 tax year, which include changes to income tax brackets and a higher standard deduction. These shifts happen every year to account for “bracket creep,” which causes people to pay more in taxes due to inflation without actually earning more income.
With the adjustments, you’ll have to make more money in 2024 to qualify for higher tax brackets, meaning you may pay less income tax next year.
2024 income tax brackets
Tax rates aren’t changing next year, but the bracket thresholds have increased:
- 37% for incomes over $609,350 ($731,200 when filing jointly)
- 35% for incomes over $243,726 ($487,450 when filing jointly)
- 32% for incomes over $191,951 ($383,900 when filing jointly)
- 24% for incomes over $100,526 ($201,150 when filing jointly)
- 22% for incomes over $47,151 ($94,301 when filing jointly)
- 12% for incomes over $11,601 ($23,201 when filing jointly)
- 10% for incomes of $11,600 or less ($23,200 when filing jointly)
A reminder that these are marginal tax rates, not flat rates on your whole income. That means you pay 10%, up to $1,160, on the first $11,600 you earn, 12% on the amount between $11,601 and $47,150, and so on.
Note: This change applies to taxes you’ll pay in 2025 for income earned in 2024, not returns filed this upcoming April.
Standard deduction increase
The standard deduction—which lowers your taxable income—is increasing by more than 5% in 2024. For individuals, the standard deduction will be $14,600 (up $750 from $13,850). For married couples filing jointly, the standard deduction will be $29,200 (up $1,500 from $27,700).
For context, the standard deduction jumped about 7% in 2023. According to IRS data, 90% of filers claim the standard deduction rather than itemizing on their returns.
The IRS is also increasing contribution limits by $500 for 401(k) and IRA plans and allowing an additional $150 in contributions to flexible spending accounts (FSAs). The Earned Income Tax Credit for those with low to moderate incomes is also increasing, from $7,430 in 2023 to $7,830 in 2024. (Here’s how to figure out if you qualify.)
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