(UnitedHeadlines.com) – Every year, the Internal Revenue Service (IRS) changes the rules for filing taxes. Here are just a few of the ways 2024 taxes are changing.
A change in tax brackets is just one of the changes for 2024 taxes. There will be a 5.4 percent increase to the income thresholds needed to reach a new tax bracket. The tax bracket adjustments use a formula involving the Consumer Price Index, which tracks services and goods purchased by consumers. This shows what is happening with inflation, which dictates changes to tax brackets as tax brackets get a larger boost when inflation is high and a moderate increase when inflation cools.
The amount for the standard deduction, which 86 percent of Americans take instead of itemizing deductions, will increase in 2024. A person’s tax filing status, either as single, married filing jointly, or head of household, dictates how much the standard deduction will increase for 2024 taxes.
Low- to moderate-income taxpayers with three or more children will see an increase in the Earned Income Tax Credit (EITC) from $7,430 to $7,830.
For 2024, the maximum allowable adoption credit will increase to $16,800. The adoption credit can help offset the costs associated with adopting a child, such as attorney fees, court costs, and travel expenses related to legal adoption.
The amount beneficiaries can exclude from a decedent’s estate will increase in 2024 to $13,610,000. The change helps wealthy families keep more of the money they left to family, friends, and charitable organizations following their death.
The annual exclusion for gifts is increasing by $1,000 from the 2023 amount. In 2024, the amount allowed to be “gifted” to another person without being hit with a gift tax will increase to $18,000.
While this is not a comprehensive list of all the changes the IRS is making, it is a few of the many changes coming to taxes in 2024.
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