IRS makes tax bracket changes for 2024 as part of annual inflation adjustments

The Internal Revenue Service (IRS) has announced changes to the 2024 tax brackets as part of its annual adjustments in response to inflation.

As highlighted by the IRS, the tax year 2024 adjustments described generally apply to income tax returns filed in 2025.

The standard deduction for married couples that file joint tax returns for tax year 2024 is rising to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married couples filing individually, the standard deduction is increasing $750 from 2023 to bring the total deduction to $14,600 for 2024, according to the IRS.

As for heads of households, the standard deduction will go up $1,100 from 2023 to $21,900 for tax year 2024.

While the top tax rate remains 37% for individual single taxpayers with incomes exceeding $609,350 ($731,200 for married couples filing jointly), tax brackets have undergone changes.

Other tax rates are as follows:

• 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

Single individuals with incomes of $11,600, or married couples who file jointly and have a combined income of $23,200, have the lowest tax rate, at 10%.

When it comes to the alternative minimum tax exemption, the amount for tax year 2024 is $85,700 and starts to phase out at $609,350; for married couples who file jointly, the amount is $133,300 which begins phasing out at $1,218,700. By comparison, in 2023, the exemption amount was $81,300 and began to phase out at $578,150; for married couples who filed jointly the exemption amount was $126,500, which started to phase out at $1,156,300.

In tax year 2024, the maximum earned Income tax credit amount is $7,830 for qualifying taxpayers with three or more qualifying children, a…