Understanding the 2024 Tax Brackets and Standard Deductions

As we approach the 2024 tax year, it’s essential to stay informed about the changes in tax brackets and standard deductions. These adjustments, primarily driven by inflation, can impact your financial planning and tax liabilities. At O1ne Mortgage, we believe in empowering our clients with the knowledge they need to make informed financial decisions. If you have any questions or need assistance with your mortgage needs, don’t hesitate to call us at 213-732-3074.

Tax Brackets for 2024: Single Filers

Tax brackets are designed to apply progressively higher tax rates as your income increases. For single filers in 2024, the tax brackets are as follows:

• 10% on income up to $11,600
• 12% on income from $11,601 to $47,150
• 22% on income from $47,151 to $100,525
• 24% on income from $100,526 to $191,950
• 32% on income from $191,951 to $243,725
• 35% on income from $243,726 to $609,350
• 37% on income over $609,350

To estimate your tax liability, find the bracket that contains your projected taxable income (adjusted gross income minus your standard deduction for 2024) and perform the calculation shown in the right-hand column.

For example, if your 2024 taxable income is $44,000, the first $11,600 of your income is taxed at 10% ($1,160), and the remaining $32,400 is taxed at 12%. Therefore, you will owe $1,160 + 12% of $32,400, or $5,048. This places you in the 12% tax bracket.

Comparatively, the tax on the same $44,000 income in 2023 would be $5,060, placing you in the 22% tax bracket. While the tax savings in 2024 may seem marginal, every bit helps, and less tax is always better than more.

Tax Brackets for 2024: Married Filing Jointly

Married couples filing jointly will also see adjustments to their tax brackets. The top bracket for 2024 starts at $731,200, compared to $693,751 in 2023. Here are the 2024 tax brackets for married couples filing jointly:

• 10% on income up to $23,200
• 12% on income from $23,201 to $94,300
• 22% on income from $94,301 to $201,050
• 24% on income from $201,051 to $383,900
• 32% on income from $383,901 to $487,450
• 35% on income from $487,451 to $731,200
• 37% on income over $731,200

What Are the Standard Deductions for 2024?

In addition to tax bracket adjustments, standard deductions are also changing in 2024. If you take the standard deduction instead of itemizing, here are the standard deductions for 2024 compared to 2023:

• Single and Married Filing Separately: $14,600 (up from $13,850 in 2023)
• Head of Household: $21,900 (up from $20,800 in 2023)
• Married Filing Jointly: $29,200 (up from $27,700 in 2023)

The Bottom Line

Adjustments for inflation help ensure that IRS marginal tax rates and standard deductions more accurately reflect the financial realities of everyday Americans. Given the recent impact of inflation, your personal finances may benefit from these adjustments. It’s a good idea to revisit your monthly budget and check your credit report and score to ensure you’re on track to meet your financial goals and make the most of any tax savings resulting from these IRS changes.

At O1ne Mortgage, we are committed to helping you navigate these changes and optimize your financial health. Whether you’re looking to refinance, purchase a new home, or need advice on managing your mortgage, our team is here to assist you. Call us today at 213-732-3074 for personalized mortgage services tailored to your needs.

Stay informed, stay prepared, and let O1ne Mortgage be your trusted partner in achieving your financial goals.