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Jun 24

December 2023

The IRS has issued tax information for 2024.  These are the numbers that you’ll use to prepare your 2024 tax returns in 2025.  There will be seven (7) tax rates in 2021.  They are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.  Please contact my office to find out the breakdown for your applicable tax on your taxable income.  Your Personal Exemption Amount we used to have, is still not separated, and included in your standard deduction.  The standard deduction amounts will increase to $14,600 for individuals and married couples filing separately, representing an increase of $750 from 2023. Married couples filing jointly will see a deduction of $29,200, a boost of $1,500 from 2023, while heads of household will see a jump to $21,900 for heads of household, an increase of $1,100 from 2023.  For 2024, the additional standard deduction amount for the aged or the blind is $1,550 for married filing joint filers.  The additional standard deduction amount increases to $1,950 for unmarried taxpayers.  For 2024, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,300 or the sum of $450 and the individual’s earned income (not to exceed the regular standard deduction amount).  The Kiddie Tax applies to unearned income for children under the age of 19, a college student, and the under the age of 24.  Unearned income is income from sources other than wages and salary, like dividends and interest.  Your child must pay taxes on their unearned income in 2024, but if that amount is more than $1,300, but less than $13,000, you may be able to elect to include that income on your return rather than file a separate return for your child.  Right now, the Child Tax Credit is a refundable child tax credit of $1,700 in 2024, unless Congress makes a late change.  For 2024, the maximum Earned Income Tax Credit (EITC) amount available is $7,830 for married taxpayers filing jointly who have three or more qualifying children—it was $7,430 in 2023, and again subject to the phaseout rules.  Capital Gains rates will not change for 2024, but the brackets for the rates will change.  Most taxpayers pay a maximum 15% rate, but a 20% tax rate applies if your taxable income exceeds the thresholds set for the 37% ordinary tax rate. Exceptions also apply for art, collectible, and section 1250 gain (related to depreciation).   The alternative minimum tax (AMT) exemption rate is also subject to inflation.  The AMT exemption amount for tax year 2024 for single filers is $85,700 and begins to phase out at $609,350 (in 2023, the exemption amount for single filers was $81,300 and began to phase out at $578,150).  In 2024, the AMT exemption amount for married couples filing jointly is $133,300 and begins to phase out at $1,218,700 (in 2023, the exemption amount for married couples filing jointly was $126,500 and began to phase out at $1,156,300.  In 2024, the foreign-earned income exclusion amount is $126,500, up from $120,000 for tax year 2023.  And, the federal gift tax exclusion will increase to $18,000 in 2024, up from $17,000 in 2023.  In closing, myself, and my staff, wish everyone a happy and safe Holiday Season, with success and love in the New Year. God Bless!  This is a very brief overview.   For details and specific assistance in applying the general information in this article, call us at your earliest convenience or contact your tax advisor.   Provided by Tracey C. Higginbotham, E.A., (321) 632-5726, a member of the National Society of Accountants.