As the year draws to a close, taxpayers should prepare for the upcoming tax season, which is expected to begin in about a month. Understanding potential tax liabilities and refunds is crucial as individuals and families plan their finances.
The Internal Revenue Service (IRS) adjusts tax brackets annually to reflect inflation, and this year, it has announced several changes for the 2024 tax filing season. The standard deduction has increased to $29,200 for married couples filing jointly, which is a $1,500 rise from the previous year. For single filers and married couples filing separately, the standard deduction will be $14,600, marking a $750 increase. Heads of households will benefit from a standard deduction of $21,900, an increase of $1,100 from 2023.
Here are the IRS tax brackets for the 2024 tax year:
– 37% for incomes over $609,350 ($731,200 for married couples filing jointly).
– 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).
– 10% for incomes of $11,600 or less ($23,200 for married couples filing jointly).
Tax Day is set for April 15, but the start of tax season for 2025 has not yet been confirmed. Historically, the IRS announces the start date in early to mid-January. In 2024, tax season will commence on January 29, having been announced on January 8. In 2023, the season began on January 23, so taxpayers should remain alert for updates in the coming weeks.
Additionally, the IRS has revealed that taxpayers can expect increased standard deductions for the 2025 tax year. For instance, the standard deduction will rise to $30,000 for married couples filing jointly, $22,500 for heads of households, and $15,000 for single filers and married individuals filing separately.
Looking ahead, the adjustments in tax brackets and standard deductions not only reflect a response to inflation but can also provide some relief to taxpayers in the coming years, allowing for more favorable financial planning. This proactive approach to tax regulations may help individuals and families better manage their financial obligations and enhance their overall economic well-being.
As we approach tax season, it is an opportune time for taxpayers to gather necessary documents and become informed about changes to maximize their benefits and ensure compliance. The adjustments signal a commitment to easing the tax burden for many, fostering a sense of optimism for financial planning going forward.