The IRS has announced the annual inflation adjustments for more than 60 tax provisions for tax year 2024. This includes updates to tax rate schedules and other tax changes, as detailed in Revenue Procedure 2023-34:

 

  • The 2024 Standard Deduction is increased shown in the chart below
  • The refundable portion of the Child Tax Credit is $1,700 (up from $1,600 in 2023)
  • The annual gift exclusion is $18,000 (up from $17,000)
  • The Unified Credit Against Estate Tax for a decedent passing away in 2024 is $13,610,000 (up from $12,920,000, an increase of $690,000)

 

Also adjusted are the tax brackets for 2024, with the highest marginal rate at 37%, outlined below:


2024 Inflation Adjustments for Retirement

IRS Notice 2023-75 included the following notable cost of living adjustments for the 2024 tax year:

  • 401(k) employee maximum contribution for 2024 is $23,000 (up from $22,500 for 2023)
    • $7,500 catch-up contribution for taxpayers aged 50 and over, remains unchanged
  • IRA contribution limit is $7,000 (increased from $6,500 in 2023)
    • $1,000 catch-up contribution is unchanged
  • SEP contribution limit of $69,000 (increased from $66,000)
  • SIMPLE contribution limit of $16,000 (increased from $15,500),
    • $3,500 catch up contribution is unchanged
  • ROTH IRA phase out limits for taxpayer MAGI of:
    • Single/HOH: $146,000 to $161,000 (up from $138,000 to $153,000 for 2023)
    • MFJ: $230,000 to $240,000 (up from  $218,000 to $228,000 )

MFS: Remains at $0 to $10,000 (not subject to cost-of-living adjustments)

 

2024 Cost-of-Living Adjustments (COLA) for Social Security

  • 3.2% increase to Social Security and SSI benefits for 2024
  • The maximum amount of earnings/wages subject to the Social Security tax (taxable maximum) will increase to $168,600
  • More of these benefits may be subject to tax because the taxable thresholds are not adjusted for inflation

 

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