IRS Announces 2024 Tax Inflation Adjustments

IRS Announces 2024 Tax Inflation Adjustments

New for 2024: Hazardous Substance Superfund Reinstated

In calendar year 2023, the IRS said, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at a United States refinery and petroleum products that are entered into the U.S. for consumption, use or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate.

For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. Crude oil or petroleum products entered after December 31, 2016, will have a tax rate of $0.26 cents a barrel for the 2024 calendar year.

2024 Income Rate Brackets

Tax RareMarried Individuals Filing Joint Returns and Surviving SpousesMarried Individuals Filing Separate ReturnsHead of HouseholdsSingle Taxpayers (other than Surviving Spouses and Heads of Households)
10%$23,200 and under$11,600 and under$16,550 and under$11,600 and under
12%Over $23,200Over $11,600Over $16,550Over $11,600
22%Over $94,300Over $47,150Over $63,100Over $47,150
24%Over $201,050Over $100,525Over $100,500Over $100,525
32%Over $383,900Over $191,950Over $191,950Over $191,950
35%Over $487,450Over $243,725Over $243,700Over $243,725
37%Over $731,200Over $365,600Over $609,350Over $609,350

Estates and Trusts

If Taxable Income IsThe Tax is
$3,100 and under10% of the taxable income
Over $3,100$310 plus 24% of the excess over $3,100
Over $11,150$2,242 plus 35% of the excess over $11,150
Over $15,200$3,659.50 plus 37% of the excess over $15,200

Standard Deduction

Filing StatusStandard Deduction
Married Individuals Filing Joint Returns and Surviving Spouses$29,200
Heads of Households$21,900
Unmarried Individuals (other than Surviving Spouses and Heads of Households)$14,600
Married Individuals Filing Separate Returns$14,600

Alternative Minimum Tax (AMT) Rate Change

Filing StatusExemption AmountThreshold Phaseout AmountComplete Phaseout Amount
Joint Returns or Surviving Spouses$133,300$1,218,700$1,751,900
Unmarried Individuals (other than Surviving Spouses)$85,700$609,350$952,150
Single Taxpayers Filing Separate Returns$66,650$609,350$875,950
Estates and Trusts$29,900$99,700$219,300

Earned Income Tax Credit (EITC) Changes

ItemNoneOne childTwo childrenThree or more children
Earned Income Amount$8,260$12,390$17,400$17,400
Max Amount of Credit$632$4,213$6,960$7,830
Threshold Phaseout Amount (Married Filing Jointly)$17,250$29,640$29,640$29,640
Completed Phaseout Amount (Married Filing Jointly)$25,511$56,004$62,688$66,819
Threshold Phaseout Amount (All other filing statuses)$10,330$22,720$22,720$22,720
Completed Phaseout Amount (All other filing statuses)$18,591$49,084$55,768$59,899

Maximum Capital Gains Tax Rates

Filing StatusMax Zero Rate AmountMax 15% Rate Amount
Married Individuals Filing Joint Returns and Surviving Spouse$94,050$583,750
Married Individuals Filing Separate Returns$47,025$291,850
Heads of Household$63,000$551,350
All Other Individuals$47,025$518,900
Estates and Trusts$3,150$15,450

Qualified Transportation Fringe Benefits: The monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking for the 2024 tax year has increased to $315, which is a $15 increase from the limit for 2023.

Cafeteria Plans: The dollar limitation on voluntary employee salary reductions for contributions to health flexible spending arrangements has increased to $3,200. The maximum carryover is $640 if the cafeteria plan permits carryover of unused amounts.

Medical Savings Account: For participant who have self-only coverage, the plan must be a high deductible with an annual deductible of at least $2,800 (a $150 increase) and not more than $4,150 (a $200 increase from the previous year). The maximum out-of-pocket expense is $5,550 (a $250 increase from 2023). For family coverage, the high deductible must have an annual deductible of not less than $5,550 (a $200 increase) and no more than $8,350 (a $450 increase from 2023). The out-of-pocket expense limit for family coverage is $10,200, which is an increase of $550 from last year.

Foreign Earned Income Exclusion: The exclusion amount is $126,500, which increased from $120,000 from 2023.

Unified Estate Tax: The basic exclusion amount for decedents who die in 2024 is $13,610,00, which increased from $12,920,000 in 2023.

Adoption Credit: For taxable years beginning in 2024, the amount of qualified adoptions expenses is up to $16,810, which increased from $15,950 in 2023.

Items not affected by indexing:  Items that were indexed for inflation in the past are currently not adjusted. This includes:

  • The personal exemption for tax year 2024 remains at 0, as it was for 2023.
  • For 2024, there is no limitation in itemized deductions as that limitation was eliminated by the Tax Cuts and Jobs Act.
  • The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in ยง 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000.

If you have any questions on the IRS tax inflation adjustments for 2024, please contact your Brown Plus advisor.

Posted In: Tax | Insights

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