Changes in 2024 Tax Brackets Due to Inflation – Introduction
Every year, the IRS adjusts tax brackets to account for inflation. Inflation is the increase in the price of goods and services over time, which means that your money doesn’t stretch as far as it used to.
By adjusting the tax brackets, the IRS ensures that people don’t end up paying more taxes just because of inflation.
For 2024, the IRS has made changes to the federal income tax brackets, which could result in lower taxes for many people.
What Are the New Tax Brackets for 2024?
Here’s a quick look at the 2024 federal income tax brackets for single filers:
- 10% tax on income up to £11,000
- 12% tax on income between £11,000 and £44,725
- 22% tax on income between £44,725 and £95,375
- 24% tax on income between £95,375 and £182,100
- 32% tax on income between £182,100 and £231,250
- 35% tax on income between £231,250 and £578,150
- 37% tax on income over £578,150
For married couples filing jointly, the brackets are doubled.
These new tax brackets reflect inflation and help ensure that people don’t pay more tax just because of the rising cost of living.
How Does This Affect You?
The new tax brackets mean that more of your income will be taxed at lower rates in 2024.
For example, if you earn the same amount of money in 2024 as you did in 2023, you might end up paying less tax because the income thresholds for each tax bracket have increased.
This is especially helpful for people who receive raises or cost-of-living adjustments to their wages.
Without these changes to the tax brackets, you could be pushed into a higher tax bracket and end up paying more taxes, even though your real income hasn’t increased.
Changes in 2024 Tax Brackets Due to Inflation – Conclusion
The 2024 tax bracket adjustments are a positive change for most taxpayers. By accounting for inflation, the IRS ensures that you don’t pay more tax than necessary.
This helps make the tax system fairer and ensures that people aren’t unfairly penalised by the rising cost of living.
Final thoughts
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