For your information only. We are not lawyers. We do not give legal advice. We do not make any guarantees for any income tax return.
STANDARD DEDUCTION INCREASED
The standard deduction has increased for 2024 for ALL filing statuses;
Married Filing Joint OR Qualifying Widow $29,200
Married Filing Separate OR Single $14,600 Head of Household $21,900
AMT EXEMPTION INCREASE
The AMT exemption amount has been increased to $85,700 ($133,300 MFJ). The income level at which the AMT exemption begins to phase out has increased to $609,350 ($1,218,700 MFJ). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
HEALTH FLEX SPENDING
For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
MEDICAL SAVINGS ACCOUNT
For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
QUALIFIED TRANSPORTATION FRINGE BENEFIT
For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
RANDOM HAZARDOUS SUBSTANCE UPDATE
Starting in calendar year 2023, the Inflation Reduction Act reinstates the Hazardous Substance Superfund financing rate for crude oil received at U.S. refineries, and petroleum products that entered into the United States for consumption, use, or warehousing. The tax rate is the sum of the Hazardous Substance Superfund rate and the Oil Spill Liability Trust Fund financing rate. For calendar years beginning in 2024, the Hazardous Substance Superfund financing rate is adjusted for inflation. For calendar year 2024 crude oil or petroleum products entered after
EIC (EARNED INCOME CREDIT)
For tax year 2024, this tax credit is worth up to $7,830 for a family with three kids. Tax filers with no kids must be at least age 25 but under age 65 to claim the credit. That is an increase of $400 from 2023.
FOREIGN INCOME TAX EXCLUSION
For tax year 2024 the foreign earned income exclusion is $126,500.increased from $120, 000 for 2023
ESTATES FOR DECEDENTS
Decedents who die during 2024 have a basic exclusion amount $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
ANNUAL EXCLUSION FOR GIFTS
The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
ADOPTION CREDIT
The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.
TAX BRACKET INCREASE
For 2024, the tax brackets for individual income tax increased as follows:
37% for individual single taxpayers with incomes greater than $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 single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
