Link: Putting Together Your Tax Information: The Short List for Businesses and Individuals

Link: IRS Fraud Alerts

IRS provides tax inflation adjustments for tax year 2024

IR-2023-208, Nov. 9, 2023

WASHINGTON - The Internal Revenue Service today announced the annual inflation adjustments for more than 60 tax provisions for tax year 2024, including the tax rate schedules and other tax changes. Revenue Procedure 2023-34 provides detailed information about these annual adjustments.

Highlights of changes in Revenue Procedure 2023-34:

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

Standard Deduction

The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

Marginal Rates

For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).

The other rates are:

• 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)

The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).

The Alternative Minimum Tax Exemption

The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). 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).

Earned Income Tax Credit (EITC)

The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.

Qualified Fransportation 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.

Dollar Limitation For Employee Salary Reductions

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.

Self-Only Coverage in a 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.

Foreign Earned Income Exclusion

For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.

Estate Taxes

Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.

Gift Exclusion

The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.

Adoptions

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.

By statute, certain items that were indexed for inflation in the past are currently not adjusted.

The personal exemption for tax year 2024 remains at 0, as it was for 2023. This elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.

For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.

The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).

IRS products now in Spanish IRS Link

• Form 1040, Form 1040-SR (for seniors)
• Instructions for Forms 1040 and 1040-SR, Schedules 1, 2, and 3

Additional products will be translated into Spanish and other languages as resources allow. Schedule LEP, Request for Change in Language Preference, is for Limited English Proficiency filers, and allows for individuals to indicate a preference for communications in a language other than English. The IRS will only send communications (such as a notice) in the preferred language if the communication has been translated. A copy of the communication in English will also be provided.

Top of Page

Hunt Personal Tax Services, Inc. is a small business enterprise specializing in Tax Preparation, Accounting, Property Management and Financial Planning. We serve individual and small business clients in the New York, New Jersey and Connecticut metro areas.

The purpose of our web site is to provide current and prospective clients with a web based communications tool which provides the following information:

• Advertises our Individual and Small Business - Tax & Accounting Services (See 'About Us' web page)
• Provides a link to our E-mail Address to receive your inquiries - (We will respond to all inquiries within 1 business day)
• Links to Useful Tax & Financial Planning sites to assist you & your family in meeting your Financial Management Objectives:
  
  • Tax Planning - (Links to IRS, NY, NJ, CT Tax Sites)
  • Investment Planning - (Links to Stocks, Bonds, Savings Bond, Mutual Funds, Bank Information and Investment/Financial Tools and Calculators)
  • Real Estate - (Links to Basic Information and Real Estate Sales)
  • Retirement Planning - (Links to Retirement Information, Social Security Administration and American Association of Retired Persons - AARP)
  • Insurance Planning - (Links to Health, Life, Home & Auto Insurance Information)
  • Estate Planning - (Links to Estate Planning and Elder Care Information)

We have relocated to our new office location in New Jersey: 15 Barbados Court Hamilton, NJ 08691