The Internal Revenue Service (IRS) recently announced the updated income tax brackets for the upcoming 2024 tax year. With no changes yet for the upcoming financial year, these changes could affect millions of taxpayers.
The new income tax brackets for 2024 include songs for the seven capitals of the United States: the 10%, 15%, 12%, 22%, 24%, 32%, 35%, and 37% tax brackets. These new levels are set at slightly higher rates than the past, with the 10% rate rising slightly from 10% to 11%, while the highest 37% rate will remain the same. These income tax brackets will apply to individuals, married couples filing jointly, heads of household, and qualifying widows and widowers.
For single filers, the income cutoff levels for the different tax brackets will be as follows: The 10% rate applies to those who make up to $9,750 a year, and the 35% rate will apply to those making over $608,350. Meanwhile, the maximum taxable income cutoff level for married couples filing jointly is set at $608,350.
The new 2024 income tax brackets are primarily geared towards facilitating a fairer system of taxation in the United States. This is also shown by their progressive manner, with the lowest rate applying to those with the lowest income and the highest rate applying to those who make the most. As such, these new tax brackets will help ensure that the highest earners of the country are paying their fair share of the taxes.
At the same time, it is important to note that the changes to the income tax brackets only affect the tax rate applicable to income up to the applicable cutoff level. This means that taxpayers will need to pay federal income tax at the applicable rate on all of their taxable income, regardless of what level of income they make.
Finally, taxpayers should be aware that these new income tax brackets do not yet apply to the 2021 tax year. The new tax brackets will take effect starting in January of 2024.