The Internal Revenue Service (IRS) has announced the annual inflation adjustments for over 60 tax provisions for the tax year 2024. Notable changes include the reinstatement of the Hazardous Substance Superfund financing rate for crude oil and petroleum products starting in 2023. For calendar year 2024, the rate for such products is $0.26 cents per barrel.

Key highlights from Revenue Procedure 2023-34 for tax year 2024 include:

Standard Deduction

  • Married couples filing jointly: $29,200 (an increase of $1,500 from 2023).
  • Single taxpayers and married individuals filing separately: $14,600 (an increase of $750 from 2023).
  • Heads of households: $21,900 (an increase of $1,100 from 2023).

Marginal Tax Rates

  • Top tax rate remains 37% for individual single taxpayers with incomes over $609,350.
  • Other rates range from 10% to 35%, depending on income levels.

Alternative Minimum Tax (AMT) Exemption

AMT exemption for tax year 2024 is $85,700, phasing out at $609,350 for individuals ($133,300 for married couples).

Earned Income Tax Credit (EITC)

Maximum EITC amount is $7,830 for qualifying taxpayers with three or more qualifying children.

Other Adjustments

  • Monthly limitation for qualified transportation fringe benefit and qualified parking: $315.
  • Employee salary reduction for health flexible spending arrangements: $3,200.
  • Medical Savings Account (self-only coverage) annual deductible: $2,800 to $4,150.
  • Foreign earned income exclusion: $126,500.
  • Basic exclusion amount for estates of decedents: $13,610,000.
  • Annual exclusion for gifts: $18,000.
  • Maximum adoption credit: $16,810.

Items Unaffected by Indexing

  • Personal exemption: $0.
  • No limitation on itemized deductions.
  • Modified adjusted gross income for the Lifetime Learning Credit is not adjusted for inflation and is phased out for incomes exceeding $80,000 ($160,000 for joint returns).

Certain provisions remain unchanged, such as the elimination of the personal exemption, no limitation on itemized deductions, and the non-adjustment of the modified adjusted gross income amount for the Lifetime Learning Credit.

Read the official guidance on the IRS website:

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