The Internal Revenue Service (IRS) keeps updating tax brackets and other taxes so that it keeps up the rhythm with inflation. Paying more or less money will depend on your personal situation and your earnings.
It was back on November 9, 2023, when the IRS revealed the new changes in the tax brackets. However, many taxpayers have not heard from them yet. This is particularly important because the new tax year is approaching.
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New thresholds and limits are on their way stated the IRS. The best thing is that these changes are for the income you receive in 2024, which means it will be necessary for when you file in 2025. Even if it seems to be too far away, it is best to get used to the new rules to avoid paying too much or too little.
NEW FEDERAL TAX BRACKETS FOR 2024
As a matter of fact, there are 7 marginal rates or tax brackets in the United States. The good thing is that the IRS said they will remain unchanged, so they will also be 37% the maximum and 10% the minimum. In between, there are rates of 35%, 32%, 24%, 22% and 12%.
Luckily, some people will be able to earn more money and remain in the same tax bracket. Some taxpayers can have earnings that are higher than $4,000, which is great with the current inflation and the exorbitant prices and mortgage interest rates.
Single filers whose earnings are $0 to $11,600 will have a rate of 10%. If you belong to the 12% rate, the IRS said that your tax bracket will be $11,601 to $47,150. It could be 22% if it is $47,151 to $100,525.
Those who have the 24% rate will have a tax bracket of $100,526 to $191,950. It could also be 32% and the bracket will be $191,951 to $243,725. Some taxpayers will be on the 35% and it will be $243,726 to $609,350. The highest will be 37% and $609,351 or more than that claimed the IRS.
THE NEW IRS TAX BRACKETS FOR MARRIED COUPLES IN 2024
The are many married couples that prefer to file jointly. It could be advantageous in many cases. The IRS has also set the new amounts for them. A 10% rate will be for those couples who earn from $0 to $23,200. Then, the 12% will be from $23,201 to $94,300. Or 22% from $94,301 to $201,050.
There will also be new figures for the 24% rate. It will be from $201,051 to $383,900. Those whose rate is 32% will have a new tax bracket from $383,901 to $487,450 said the IRS.
If your tax rate is 35%, the tax brackets will be much higher. From $487,451 to $731,200. Some may be in the 37% tax rate. The amount the IRS has set for them is $731,200 or more than that. Comparing that 2024 figure with the one in 2023 you can see that it is $37,449 higher.