2024 Tax Update

Tax rates change annually. These are the updates for 2024.

2024 income tax brackets

For individuals, taxable income over…

$1	10%
$11,600	12%
$47,150	22%
$100,525	24%
$191.950	32%
$243,725	35%
$609,350	37%

For married couples filing joint returns, taxable income over…

$1	10%
$23,200	12%
$94,300	22%
$201,050	24%
$383,900	32%
$487,450	35%
$731,200	37%

For heads of households, taxable income over…

$1	10%
$16,550	12%
$63,100	22%
$100,500	24%
$191,150	32%
$243,700	35%
$609,350	37%

2024 Standard Deduction

Filing as	Under 65	Age 65 +
Individuals	$14,600	$16,550
Married filing joint	$29,200	$32,300*
Head of household	$21,900	$23,850

* Single and age 65 plus, add $1,950.
**Each married person age 65 or over add $1,550.

2024 Long-term capital gains rates

#LTCG

For unmarried individuals, taxable income over…

$1	0%
$47,025	15%
$200,000	18.8%*
$518,900	23.8%*

For married individuals filing joint returns, taxable income over…

$1	0%
$94,050	15%
$250,000	18.8%*
$583,750	23.8%*

For heads of household, taxable income over…

$1	0%
$63,000	%15
$200,000	18.8%*
$551,350	23.8%*

*Includes 3.8% net investment income tax

2024 IRA contribution limits

#IRA

Under age 50	$7,000
Age 50 or over	$8,000

Traditional and Roth IRA contribution limits

Depending upon whether or not you and your spouse have a retirement plan at work, your IRA contribution may not be tax deductible and a Roth contribution might not be possible. Scroll down.

When do you have to take your required minimum distribution (RMD)?

2024 Traditional IRA deductible contribution income limits

#DEDUCTIBLE

Covered by a plan at work

Single or Head of Household…	….and your Modified AGI is…	…then you can take…
	$77,000 or less	full deduction
	in between	partial deduction
	$87,000 or more	no deduction
Married filing jointly or qualifying widower…	…and your Modified AGI is…	…then you can take…
	$123,000 or less	full deduction
	in between	partial deduction
	$143,000 or more	no deduction

Follow this chart if you do have a retirement plan at work

Not covered by a plan at work

Single, Head of Household or Qualifying Widower	Regardless of your income…	…you can take a full deduction
Married with a spouse who does not have a plan at work	Regardless of your income…	…you can take a full deduction
Married with a spouse who does have a plan at work …	…and your Modified AGI is…	…then you can take…
	$230,000 or less	full deduction
	in between	partial deduction
	$240,000 or more	no deduction

Follow this chart if you don’t have a retirement plan at work

2024 Roth IRA contribution income limits

#Roth

Roth IRA contributions, but not Roth conversions, are limited by income.

2024 income	Single	Married Filing Jointly
May make a full Roth contribution	$146,000 or less	$230,000 or less
Contribution gradually reduced	in between	in between
Not eligible	$161,000 or more	$240,000 or more

Maximum income for Roth contributions

2024 SEP and Simple IRA contribution limits

#SEP

SEP IRAs and Simple IRAs allow larger contributions than IRAs, but as discussed in the book, require rules to be followed.

SEP	$69,000
Simple	$16,000

The Simple IRA allows another $3,500 contribution if you are over age 50.

2024 401k contribution limits

#401K

Employee	$23,000
Max including employer	$69,000
Over age 50 “catch up” amount	$7,500
Highly-compensated employee, income above	$225,000

2024 estate tax and gift tax

#ESTATE

The estate tax exemption is:

Unmarried individuals	$13.61 million
Married couples	$27.22 million

These limits expire in 2025.

The annual gift tax exclusion is $18,000.

Charitable contributions

#charity

Donating to a Qualified Charity:

% of AGI for cash contributions	60%
% of AGI for appreciated assets	30%

People over age 70½ may use a Qualified Charitable Distribution, or QCD, to make a donation up to $100,000.

2024 Social Security and Medicare Taxes

#FICA

These are also called FICA taxes, or payroll taxes.

Maximum earnings subject to Social Security Tax (OASDI):	$168,600
OASDI tax rate	12.4%
Max earnings subject to Medicare tax	no cap
Medicare tax rate	2.9%

Self-employed people pay all of it: 15.3%. Or, for employees, the employee pay half, employers pay half.

Medicare surtax (IRMAA) in 2024

#IRMAA

IRMAA looks back two years. So for 2024, we look at year 2022 modified adjusted gross income above….

Single	MFJ	MF Separate	2022 Part B Premium	Part D surtax
$1	$1	$1	$174.70	$0
$103,000	$206,000	$97,000	$244.60	$12.90
$129,000	$258,000		$349.40	$33.30
$161,000	$322,000		$454.0	$53.80
$193,000	$386,000		$559.00	$74.20
$499,999	$749,999	$403,000	$594.00	$81.00

Income earned two years ago forces a monthly Medicare surtax for up to two years.

2024 HSA, HRA and FSA

#HSA

HSA

Health savings accounts

HSA annual contribution individual	$4,150
HSA annual contribution family	$8,300
HSA over age 55 catch-up	$1,000

QSEHRA

Small business HRA (health reimbursement arrangement):

QSEHRA annual contribution limit individual	$6,150
QSEHRA annual contribution limit family	$12,450

FSA

Flexible Spending Accounts

FSA contribution limit	$3,200
Dependent care FSA contribution limit	$5,000

To get a tax-deduction for an HSA contribution, then you must have a high deductible health insurance plan. Here are the minimum deductibles for 2023:

Min. HSA individual deductible	$1,600
Min. HSA family deductible	$3,200

Also, an HSA approved insurance plan must have a maximum out of pocket cost that does not exceed $9,450 or $18,900 for individuals and families.

Contact an AIWM Financial Planner

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