2024 Key Tax Changes & Amounts
TL/DR –
The article provides detailed information on the tax amounts for 2024. The main changes include inflation-adjusted wider income tax brackets, increased income thresholds for long-term capital gains and qualified dividends, a rise in AMT exemptions, and record-high HSA contribution limits. The article also mentions increased limits for employees’ health flexible savings accounts, tax-free employer-provided parking, and income exclusion for U.S. taxpayers working abroad.
2024 Key Tax Figures
Tax Brackets
Due to inflation, income tax brackets for individuals in 2024 have broadened, while tax rates remain the same. Check out the 2023 and 2024 Income Tax Brackets and Federal Rates for further details.
Long-term Capital Gains and Qualified Dividends Rates
No changes to tax rates on long-term capital gains and qualified dividends, but income thresholds for different rates have increased for 2024. Taxable incomes up to $94,050 for joint filers, $63,000 for heads of household, and $47,025 for single filers see a 0% tax rate. A 20% rate applies from $583,751 for joint, $551,351 for heads of households, and $518,901 for single filers. A 15% tax rate applies between these breakpoints.
AMT
The 2024 AMT exemptions increase to $133,300 for couples and $85,700 for singles and heads of households. Phaseout zones begin at $1,218,700 for couples and $609,350 for others, with a 28% AMT rate above $232,600.
Kiddie Tax
Kiddie tax in 2024 lessens. The first $1,300 of a child’s unearned income under age 19 (24 if a student) is tax-free. The next $1,300 is charged at the child’s rate, while the parent’s rate applies to any excess.
Fringe Benefits
Employees with health flexible savings accounts can defer up to $3,200. The cap on tax-free employer-provided parking is set at $315 per month in 2024, with an equivalent exclusion for mass transit passes and commuter vans. U.S. taxpayers working abroad can exclude $126,500 income, provided they meet eligibility requirements.
HSA Contributions
2024 sees record HSA contribution limits with individuals allowed up to $4,150 and families up to $8,300. Refer to the 2024 FSA and HSA Contribution Limits for more details.
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