New York (CNN) — If you like to plan your taxes in advance, the IRS this week released the new inflation-adjusted income tax brackets and standard deduction amounts that will apply for the 2024 tax year.
Translation: These are the numbers that will be relevant to the tax return that most Americans will file in early 2025.
The IRS makes inflation adjustments to tax brackets, the standard deduction, and some other tax breaks annually. The changes are intended to protect taxpayers from the effects of inflation, said Alex Durante, an economist at The Tax Foundation. However, the net effect of the changes will not materially change an individual’s tax burden.
In other words: “Inflation adjustment does not put additional money in people’s pockets. It just keeps them from paying higher taxes when their inflation-adjusted income (also called real income) rises by 7%,” Robert McClelland, a senior fellow at the Tax Policy Center, wrote in a blog post.
Higher standard deduction
For individuals and married couples who file separately, the new federal standard deduction will increase to $14,600 next year, up from $13,850 this year.
For married couples filing jointly, the standard deduction will increase from the current $27,700 to $29,200.
And for people filing as head of household, the standard deduction is $21,900, up from $20,800 today.
Most filers claim the standard deduction. In other cases, you can also save more in your tax-deferred 401(k) and IRA accounts.
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Originally posted 2023-11-12 01:26:12.