2024 Federal Income Tax Brackets, Standard Deductions, and Tax Rates

Every year, the Internal Revenue Service (IRS) updates federal income tax rates, allowances, and thresholds to reflect inflation adjustments. For individual taxpayers filing for the 2024 tax year in 2025, the highest tax rate is set at 37%. Standard deductions, tax bracket ranges, other deductions, and phaseouts also undergo annual inflation adjustments.

Key Takeaways:

  • The IRS annually revises federal tax rates, allowances, and thresholds for inflation.
  • Taxpayers can claim a standard deduction to lower taxable income and an additional deduction if they are 65 or older and/or blind.
  • Federal tax brackets for 2024 range from 10% to 37%.
  • Various individual tax credits are available, including the earned income credit and the qualified adoption expenses credit.
  • Contribution limits to tax-advantaged retirement accounts typically change each year.

Federal Tax Rates and Brackets

For the 2024 tax year, there are seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The highest income earners fall into the 37% bracket, while those with the lowest incomes are taxed at 10%. The tax rates and brackets for 2024 are detailed in the following chart.

Standard Deduction

The standard deduction is a specific amount that taxpayers can use to reduce their taxable income when filing their annual tax returns. Taxable income is calculated as your adjusted gross income (AGI) minus any itemized deductions or the standard deduction.

2024 Standard Deductions

For the 2024 tax year, the IRS has set the standard deduction amounts as follows:

  • $14,600 for single filers
  • $14,600 for married couples filing separately
  • $21,900 for heads of households
  • $29,200 for married couples filing jointly
  • $29,200 for surviving spouses

Additionally, individuals who are aged 65 or older or are blind can claim an extra standard deduction of $1,550. This amount increases to $1,950 for unmarried individuals who are not surviving spouses. Dependents can claim a standard deduction of $1,300 or $450 plus their earned income, whichever is higher.

Capital Gains

Capital gains tax rates are generally lower than ordinary income tax rates, but they vary based on the taxpayer’s taxable income and filing status. The maximum adjusted capital gains rates apply to both regular income tax and the alternative minimum tax.

For the 2024 tax year, you will need to pay capital gains tax if your income exceeds

  • $94,050 for married couples filing jointly
  • $47,025 for married couples filing separately
  • $63,000 for heads of households
  • $47,025 for single filers

The 15% capital gains rate applies to adjusted net capital gains for:

  • Joint returns up to $583,750
  • Married individuals filing separately up to $291,850
  • Heads of households up to $551,350
  • Single filers up to $518,900
  • For any income above these thresholds, the applicable capital gains rate is 20%.

Individual Tax Credits

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is adjusted annually for inflation. For the 2024 tax year, the maximum EITC for taxpayers with three or more children is $7,830. For married couples filing jointly, the credit begins to phase out at an adjusted gross income (or earned income, if higher) of $29,640 and phases out completely at $66,819.

Qualified Adoption Expenses

For 2024, the credit for qualified adoption expenses, including the special credit for adopting a child with special needs, is set at $16,810. Additionally, the exclusion from an employee’s income for qualified adoption expenses paid or reimbursed under an employer plan is also increased to $16,810.

Lifetime Learning Credit

The Lifetime Learning Credit (LLC) provides a maximum of $2,000 per return for qualified educational expenses for a taxpayer, spouse, or dependent. This credit phases out for taxpayers with a modified adjusted gross income (MAGI) exceeding $80,000 ($160,000 for joint returns). Unlike other credits, the LLC has not been adjusted for inflation in recent years.

Foreign Earned Income Exclusion

The foreign earned income exclusion amount for the 2024 tax year is set at $126,500 by the IRS.

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) applies to income above certain exemption levels, calculated by adding back specific tax benefits to regular taxable income. For the 2024 tax year, the AMT exemption levels are:

  • $133,300 for joint returns
  • $85,700 for unmarried individuals
  • $66,650 for married individuals filing separately

These exemption levels phase out at:

  • $1,218,700 to $1,751,900 for joint returns
  • $609,350 to $952,150 for unmarried individuals
  • $609,350 to $875,950 for married individuals filing separately

The AMT rate is 28% for alternative minimum taxable income up to $232,600 for joint and single filers ($116,300 for married individuals filing separately) for the 2024 tax year.

What Are the 2024 Tax Brackets?

The IRS has maintained the same seven federal tax brackets for 2024: 10%, 12%, 22%, 24%, 32%, 35%, and the top bracket at 37%. However, the income thresholds for these brackets have been adjusted upward to account for inflation. The amount of tax you owe will depend on your income and your filing status, such as single filer or married filing jointly.

How Did Standard Deductions Change for the 2024 Tax Year?

The standard deduction amounts have increased for 2024. The IRS has set the standard deductions as follows:

  • $14,600 for single filers
  • $14,600 for married couples filing separately
  • $21,900 for heads of households
  • $29,200 for married couples filing jointly
  • $29,200 for surviving spouses

Did the Child Tax Credit Change?

The child tax credit reverted to pre-2021 levels in 2022. For the 2024 tax year, the refundable portion of the $2,000 child tax credit for each child under 17 has been adjusted for inflation and is now $1,700.

The Bottom Line

Each year, typically in November, the IRS announces adjustments for federal taxes for the upcoming tax year. These adjustments include changes to tax brackets, standard deductions, tax credits, and more. Staying informed about these updates is crucial to ensure accurate tax filing and to avoid overpayment or underpayment.