The Internal Revenue Service (IRS) changes more than 60 tax rules every year to account for inflation. This stops something called "bracket creep." People move into higher tax brackets or lose value from credits and benefits when inflation rises instead of their real income rising. This is called "bracket creep."
The IRS previously used the Consumer Price Index (CPI) as a measure of inflation prior to 2018. However, with the Tax Cuts and Jobs Act of 2017 (TCJA), the IRS now uses the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction amounts, and credit values accordingly.
The new inflation adjustments are for tax year 2024, for which taxpayers will file tax returns in early 2025. Note that the Tax Foundation is a 501(c)(3) educational nonprofit and cannot answer specific questions about your tax situation or assist in the tax filing process.
2024 Federal Income Tax Brackets and Rates
In 2024, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows (Table 1). The federal income tax has seven tax rates in 2024: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The top marginal income tax rate of 37 percent will hit taxpayers with taxable income above $609,350 for single filers and above $731,200 for married couples filing jointly.
Table 1. 2024 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households
| Tax Rate | For Single Filers | For Married Individuals Filing Joint Returns | For Heads of Households |
|---|---|---|---|
| 10% | $0 to $11,600 | $0 to $23,200 | $0 to $16,550 |
| 12% | $11,600 to $47,150 | $23,200 to $94,300 | $16,550 to $63,100 |
| 22% | $47,150 to $100,525 | $94,300 to $201,050 | $63,100 to $100,500 |
| 24% | $100,525 to $191,950 | $201,050 to $383,900 | $100,500 to $191,950 |
| 32% | $191,950 to $243,725 | $383,900 to $487,450 | $191,950 to $243,700 |
| 35% | $243,725 to $609,350 | $487,450 to $731,200 | $243,700 to $609,350 |
| 37% | $609,350 or more | $731,200 or more | $609,350 or more |
Standard Deduction and Personal Exemption
The standard deduction will increase by $750 for single filers and by $1,500 for joint filers (Table 2). Seniors over age 65 may claim an additional standard deduction of $1,950 for single filers and $1,550 for joint filers.
The personal exemption for 2024 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA).
Table 2. 2024 Standard Deduction
| Filing Status | Deduction Amount |
|---|---|
| Single | $14,600 |
| Married Filing Jointly | $29,200 |
| Head of Household | $21,900 |
| Additional Amount for Married Seniors | $1,550 |
| Additional Amount for Unmarried Seniors | $1,950 |
Source: Internal Revenue Service, "Revenue Procedure 2023-34."
Alternative Minimum Tax
The alternative minimum tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel income tax system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.
The AMT uses an alternative definition of taxable income called alternative minimum taxable income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, the exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.
The AMT exemption amount for 2024 is $85,700 for singles and $133,300 for married couples filing jointly (Table 3).
Table 3. 2024 Alternative Minimum Tax (AMT) Exemptions
| Filing Status | Exemption Amount |
|---|---|
| Unmarried Individuals | $85,700 |
| Married Filing Jointly | $133,300 |
Source: Internal Revenue Service, "Revenue Procedure 2023-34."
In 2024, the 28 percent AMT rate applies to excess AMTI of $232,600 for all taxpayers ($116,300 for married couples filing separate returns).
AMT exemptions phase out at 25 cents per dollar earned once AMTI reaches $609,350 for single filers and $1,218,700 for married taxpayers filing jointly (Table 4).
Table 4. 2024 Alternative Minimum Tax (AMT) Exemption Phaseout Thresholds
| Filing Status | Threshold |
|---|---|
| Unmarried Individuals | $609,350 |
| Married Filing Jointly | $1,218,700 |
Source: Internal Revenue Service, "Revenue Procedure 2023-34."
Earned Income Tax Credit
The maximum earned income tax credit (EITC) in 2024 for single and joint filers is $632 if the filer has no children (Table 5). The maximum credit is $4,213 for one child, $6,960 for two children, and $7,830 for three or more children.
Table 5. 2024 Earned Income Tax Credit (EITC) Parameters
| Filing Status | No Children | One Child | Two Children | Three or More Children | |
|---|---|---|---|---|---|
| Single or Head of Household | Income at Max Credit | $8,260 | $12,390 | $17,400 | $17,400 |
| Maximum Credit | $632 | $4,213 | $6,960 | $7,830 | |
| Phaseout Begins | $10,330 | $22,720 | $22,720 | $22,720 | |
| Phaseout Ends (Credit Equals Zero) | $18,591 | $49,084 | $55,768 | $59,899 | |
| Married Filing Jointly | Income at Max Credit | $8,260 | $12,390 | $17,400 | $17,400 |
| Maximum Credit | $632 | $4,213 | $6,960 | $7,830 | |
| Phaseout Begins | $17,250 | $29,640 | $29,640 | $29,640 | |
| Phaseout Ends (Credit Equals Zero) | $25,511 | $56,004 | $62,688 | $66,819 |
Child Tax Credit
The maximum child tax credit is $2,000 per qualifying child and is not adjusted for inflation. The refundable portion of the child tax credit is adjusted for inflation and will increase from $1,600 to $1,700 for 2024.
Capital Gains Tax Rates and Brackets (Long-Term Capital Gains)
Long-term capital gains face different brackets and rates than ordinary income (Table 6.)
Table 6. 2024 Capital Gains Tax Brackets
| For Unmarried Individuals, Taxable Income Over | For Married Individuals Filing Joint Returns, Taxable Income Over | For Heads of Households, Taxable Income Over | |
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $47,025 | $94,050 | $63,000 |
| 20% | $518,900 | $583,750 | $551,350 |
Source: Internal Revenue Service, "Revenue Procedure 2023-34."
Qualified Business Income Deduction (Sec. 199A)
The Tax Cuts and Jobs Act of 2017 (TCJA) includes a 20 percent deduction for pass-through businesses. Limits on the deduction begin phasing in for taxpayers with income above $191,950 (or $383,900 for joint filers) in 2024 (Table 7).
Table 7. 2024 Qualified Business Income Deduction Thresholds
| Filing Status | Threshold |
|---|---|
| Unmarried Individuals | $191,950 |
| Married Filing Jointly | $383,900 |
Source: Internal Revenue Service, "Revenue Procedure 2023-34."
Annual Exclusion for Gifts
In 2024, the first $18,000 of gifts to any person are excluded from tax, up from $17,000. The exclusion is increased to $185,000 from $175,000 for gifts to spouses who are not citizens of the United States.
