The US Internal Revenue Service (IRS) has recently announced the standard individual income tax brackets that will be used to calculate federal income taxes for the 2024 tax year. The standard brackets, which are adjusted annually by the IRS, are set up to help ensure that people with the same level of income pay the same amount of taxes.
With the new information from the IRS, it is now clear that the standard income tax brackets for 2024 will be similar to the year 2020. For individuals, the 10%, 12%, 22%, 24%, 32%, 35%, and 37% brackets remain unchanged from the 2020 income tax year. The income ranges of these brackets have been adjusted to account for inflation.
In addition, the IRS has included a new 37% tax bracket for higher incomes. The range for this new bracket will be larger than the earlier brackets, so those with higher incomes will pay a higher tax rate.
The IRS has also announced changes to the income tax brackets for married couples filing jointly and qualifying widow(er)s. For these filers, the 10%, 12%, 22%, 24%, 32%, and 35% brackets remain the same, but the 37% bracket has been expanded to cover a larger range of income. This change helps to ensure that married couples filing jointly and qualifying widow(er)s face similar income tax rates as individuals.
Finally, the IRS has extended the Earned Income Tax Credit (EITC) for taxpayers who qualify. The EITC is a refundable credit that is available to those with relatively low incomes. This change is designed to provide additional assistance to those who need it most.
Overall, the new income tax brackets for 2024 that have been announced by the IRS are largely similar to the brackets that were used in 2020. The expanded 37% tax bracket and the extended EITC are both designed to provide additional fairness and assistance to those who need it. It is important to note that income tax withholding rates and amounts for the current year can be found on IRS Form W-4. Therefore, taxpayers should check their withholding amounts to make sure they are paying the correct amount of taxes throughout the year.
