GREENSBORO, N.C. — Did you get a raise for this next year? No?!?!
Making the same money in 2024 that you're making in 2023 doesn't sound like there's an upside to it but, the IRS’ latest adjustments to tax filing have a way for you to cash in.
“Because the standard deduction has increased, because the income tax brackets have now increased, you are going to be paying less taxes in 2024 than what you have in 2023. And because of that, what is going to be withheld out of your paycheck will also decrease so you should see more income in your paycheck,” said Ryan Dodson of Liberty Tax Services.
The IRS adjusts the tax brackets every year due to inflation. The last adjustment for 2023 was 7%, that’s a whopper. For the tax year of 2024, the adjustment is 5.4%.
What does that mean for you? Let's use this example:
Married filing jointly—22% tax bracket
2023: Income between $89,450 - $190,750
2024: Income between $94,300 - $201,050.
The IRS is making changes so, should we? Should we change what we withhold from our paychecks next year due to these adjustments?
“No reason to change your withholding unless it's something big like having a child, having a child go to college, a large bonus, or your filing status changes like getting divorced or married. That's when you need to look at your tax bracket and change your withholding,” said Dodson.
here's a look at all the income brackets from the IRS webpage:
Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).
The other rates are:
35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)
The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).