On November 9, 2023 the IRS released the 2024 tax brackets, standard deduction and retirement account limits. As a result of the high inflation seen in 2023, brackets will increase by about 5.4% with similar increases seen in other limits.
2024 Standard Deduction
The 2024 standard deduction for Single taxpayers will increase by $750 to $14,600 and by $1,500 for Married Filing Joint taxpayers to $29,200. Head of Household will increase by $1,100 to $21,900.
Other increases announced include the phase-out limitations for the Qualified Business Income Deduction, limitation on use of cash method of accounting, excess loss limitation thresholds and the foreign earned income exclusion.
Additionally, the annual exclusion for gift tax increased to $18,000 from $17,000 and the lifetime exclusion per person increased to $13,610,000 from $12,920,000.
Finally, the IRS increased the amount of flat dollar penalties for late filed returns, such as for partnerships ($245), S Corporations ($245) and 1099s ($330).
If you have any questions on these changes or want to look at your situation before the end of 2023, please feel free to reach out to us.
Edward McWilliams, CPA
Ed is a Partner in the firm’s tax and business advisory practice focusing on providing services to middle market private companies across different industries as well as to early stage startups. Ed has over a decade of experience providing tax and business consulting services to these companies of different sizes and across different industries, bringing a broad and diverse knowledge base and strategic solutions to the many complex issues that businesses face.
Kayla Vigorito, MBA
Kayla is a member of Cerini & Associates’ tax staff which provides services across a variety of industries including healthcare, construction, retail, manufacturing, service, and technology.