New Tax Bracket for 2024 (Plus Tips on How to Make Your Taxable Income Low)

Tax 2024 icon in the wooden cube for income tax return and submit tax for payment tax documents online to the government.

As the new year begins, so does the countdown to the new tax season. When January rolls around, we’ll all dig through receipts and scratch our heads over forms. However, as you prepare for the 2024 tax season, it is equally essential to be aware of the changes that may impact your filing in the next tax year. While the tax rates remain unchanged, the IRS has introduced tax brackets for tax year 2024 (filings due in 2025) to adjust for inflation. Understanding these changes is important for anyone looking to manage their finances wisely.

Updated Income Tax Brackets for Tax Years 2023 and 2024

Tax brackets determine the percentage of your income that you owe in taxes, and they often change to keep pace with inflation and economic shifts. Currently, there are seven tax rates ranging from 10% to 37%, which work ‘’progressively’. This means you pay higher rates as your income increases. To know your tax bracket, consider your filing status and taxable income.

Here is a side-by-side comparison of the tax years 2023 (due in April 2024) and 2024 (due in April 2025) income tax brackets for each filing status.

Single Filers

Tax Rate2023 Income Bracket2024 Income Bracket
10%$0 to $11,000$0 to $11,600
12%$11,001 to $44,725$11,601 to $47,150
22%$44,726 to $95,375$47,151 to $100,525
24%$95,376 to $182,100$100,526 to $191,950
32%$182,101 to $231,250$191,951 to $243,725
35%$231,251 to $578,125$243,726 to $609,350
37%$578,126 or above$609,351 or above

Married Filing Jointly

Tax Rate2023 Income Bracket2024 Income Bracket
10%$0 to $22,000$0 to $23,220
12%$22,001 to $89,450$23,221 to $94,300
22%$89,451 to $190,750$94,301 to $201,050
24%$190,751 to $364,200$201,051 to $383,900
32%$364,201 to $462,500$383,901 to $487,450
35%$462,501 to $693,750$487,451 to $731,200
37%$693,751 or above      $731,201 or above

Married Filing Separately

Tax Rate2023 Income Bracket2024 Income Bracket
10%$0 to $11,000$0 to $11,600
12%$11,001 to $44,725$11,601 to $47,150
22%$44,726 to $95,375$47,151 to $100,525
24%$95,376 to $182,100$100,525 to $191,950
32%$182,101 to $231,250$191,951 to $243,725
35%$231,251 to $346,875$243,726 to $365,600
37%$346,876 or above$365,601 or above

Head of Household    

Tax Rate2023 Income Bracket2024 Income Bracket
10%$0 to $15,700$0 to $16,550
12%$15,701 to $59,850$16,551 to $63,100
22%$59,851 to $95,350$63,101 to $100,500
24%$95,351 to $182,100$100,501 to $191,950
32%$182,101 to $231,250$191,951 to $243,700
35%$231,251 to $578,100$243,701 to $609,350
37%$578,101 or above$609,351 or above

How Tax Brackets Work

Contrary to a common misconception, your entire income isn’t taxed at a single rate; instead, the tax system operates on a marginal basis, which means different portions of your income are taxed at different rates. Let’s break it down with an example.

Let’s say you’re a single filer with a taxable income of $80,000 in 2023. While your total income places you in the 22% tax bracket, it doesn’t mean the entire $80,000 is subject to a flat 22% tax rate.  Instead, you’re paying different rates on different chunks of your income.

Here’s the breakdown:

  • The first $11,000 is taxed at a rate of 10 percent, resulting in $1,100.
  • The next portion, $11,001 to $44,725, is taxed at 12 percent, resulting in $4,046.88.
  • The remaining income, $44,726 to $80,000, is taxed at 22 percent, resulting in $7760.28.

By adding these amounts, your total tax liability would be $12,907.16 without factoring in any itemized or standard deduction.

Smart Tips for Lowering Your Tax Bracket and Paying Less Taxes

Nobody likes paying more taxes than necessary, and there are legitimate ways to optimize your financial situation. Here are some tips to help you potentially move into a lower tax bracket and reduce your overall tax bill.

1.      Claim Tax Credits

Explore available tax credits that might apply to your situation, such as the Child Tax Credit, Education Credits, or the Earned Income Tax Credit.

2.      Contribute to Retirement Accounts

Consider contributing to retirement accounts like a 401(k) or an Individual Retirement Account (IRA).

3.      Maximize Deductions

Take full advantage of available deductions. Whether it’s charitable contributions, mortgage interest, or eligible business expenses, deductions can significantly reduce your taxable income. Click here to learn more about tax deductions.

4.      Utilize Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)

If offered by your employer, take advantage of Flexible Spending Accounts and Health Savings Accounts for medical expenses. Contributions to these accounts are often tax-free, reducing your taxable income.

5.      Consider Tax-Efficient Investments

Opt for investments with favorable tax treatment, such as long-term capital gains and qualified dividends. These are typically taxed at lower rates.

6.      Review Your Filing Status

Assess whether changing your filing status could be advantageous. Sometimes, married couples may benefit from filing jointly or separately based on their financial situation. Head of household status can also offer tax advantages for specific individuals.

Save More with Tax Samaritan

As the new tax year unfolds, staying updated on changes in tax laws is important for effective tax planning and minimizing your tax burden. While this guide provides valuable insights, we highly advise contacting a tax professional for personalized advice. Each tax situation is different and requires a unique solution.

If you have any questions or concerns about the recent tax changes or require assistance with your tax filing, don’t hesitate to contact us at Tax Samaritan. If you would like a quote, please click the button below to answer a few basic questions to help us understand your tax situation and filing requirements.

All About Randall Brody
Randall is the Founder of Tax Samaritan, a boutique firm specializing in the preparation of taxes and the resolution of tax problems for Americans living abroad, as well as the other unique tax issues that apply to taxpayers. Here, they help taxpayers save money on their tax returns.

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