New York (CNN) — If you are someone who likes to plan ahead on your taxes, the IRS this week released the new inflation-adjusted income tax brackets and standard deduction amounts that will be in effect for tax year 2024.
Translation: These are the numbers that will be relevant to the tax return most Americans will file in early 2025.
The IRS makes inflation adjustments annually to tax brackets, the standard deduction and some other tax breaks. The changes are designed to protect taxpayers from the effects of inflation, said Alex Durante, an economist at The Tax Foundation. But the net effect of the changes will not meaningfully alter a person’s tax burden.
Put another way, “the inflation adjustment isn’t putting extra money in people’s pockets. It’s just keeping them from facing higher taxes if their inflation-adjusted incomes (also known as real incomes) rise by 7%,” wrote Robert McClelland, a senior fellow at the Tax Policy Center, in a blog post.
Higher standard deduction
For individuals and married people filing separately, the new federal standard deduction next year will increase to $14,600, up from $13,850 this year.
For married couples filing jointly, the standard deduction will rise to $29,200, up from $27,700 currently.
And for people who file as head of household, the standard deduction will be $21,900, up from $20,800 today.
Most filers claim the standard deduction. Others will you will be allowed to save more in your tax-advantaged 401(k) and IRA too.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
