(TheConservativeTimes.org) – The IRS has released new guidelines for income tax brackets standard deduction amounts, which will apply to the 2024 tax year.
The new tax brackets are inflation-adjusted, and will see some taxpayers pay less, but some may end up owing the government more. The guidelines do not yet apply to the 2023 taxes people will file next year – they will only take effect for 2024 taxes, which will be filed in 2025.
The standard reduction, which pertains to the amount of income on which Americans are taxed, will increase by $1,500 to $29,000 for married couples who file joint returns. For single filers, the standard reduction will move up to $14,600, an increase of $750. For heads of households, their standard reduction will see a $1,100 increase to $21,900.
Speaking to Newsweek, Jim Seida, a business professor at the University of Notre Dame, said that the adjustment will likely result in more people taking the standard deduction compared to the years prior.
Seida explained that the increase and standard deduction will bring down taxes for taxpayers who claim the standard deduction. Seida also pointed out that while taxes may be lower for some people, inflation has seen prices increase, meaning people need to shell out more even for basic commodities.
Taxes for people with higher wages will also go up under the new guidelines. People who make more than $609,350 (or $731,200 for joint filings for married couples) will see a tax rate of 37%. Americans who earn more than $243,725 (or $487,450 for joint filings for married couples), as well as $191,950 and up in wages (or $383,900 for joint filings for married couples) will have a 32% tax rate.
There will also be changes to the alternative minimum tax exemption, which will now be at $85,700 from the previous $81,300, and goes away at $609,350 instead of the previous $578,150.
Robert McClelland from the Tax Policy Center explains that the adjustment is to reflect the higher cost of living, brought about primarily by inflation. The adjustment is so that taxpayers whose wages just keep up with inflation rates are prevented from being classified into higher tax brackets, which would mean more taxes for these filers.
However, McClelland stressed that the adjustment for inflation doesn’t necessarily give people more money to spend – in fact, he states that “average real incomes aren’t rising, they’re falling.”
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