After scorching hot inflation pushed income-tax brackets and a widely-used tax deduction to their largest single-year increase in decades during 2023, another round of sizable adjustments are coming next year.
Yet the 2024 increases will not be as steep for tax brackets and the standard deduction.
The ranges on income-tax brackets increased by approximately 5.4% for 2024 returns, numbers from the the Internal Revenue Service showed Thursday. The brackets will apply to taxes filed in 2025 on income earned in 2024.
The ranges increased by approximately 7% when the IRS announced its inflation adjustments last year for 2023 returns. That was the largest increase in decades, according to Robert McClelland, senior fellow at the Tax Policy Center. The 5.4% increase is the second-largest yearly increase to the brackets, while a 5.3% increase in 1992 was the third-largest increase, McClelland noted.
For both 2023 and 2024, the tax code’s sizeable inflation adjustments reflect “a bad thing: that your paycheck buys less than it used to,” McClelland said.
Each year, the IRS adjusts tax brackets, the standard deduction and approximately 60 other tax provisions that are designed to adjust higher for inflation.
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The larger 2024 standard deduction is $14,600 for individuals, up $750 from this year’s amount. The standard deduction is $29,200 for married couples filing jointly, up $1,500.
In a time of rising costs, the size of those increases matter as people eye the size of their potential tax bill or refund. The upward adjustments are meant to address “bracket creep,” a term that refers to households moving into higher tax brackets that haven’t changed, while inflation has pushed up their income — but not their spending power.
The effects of bracket adjustments can vary from household to household. Bracket management should be a particular focus for people planning their retirement, business owners and donors considering charitable contributions, experts say.
Generally, if a person’s income amount stays the same from one year to the next, they’ll be taxed slightly less as brackets increase.
A smaller tax bill may sound appealing, but it also means their wages were stagnant year over year. If a person’s income rises around the same rate as the inflation adjustments and they have no major tax events — like the birth of a child or a home sale — their tax situation should stay around the same.
Americans’ hourly wages grew by a median 5.8% in October from a year earlier, according to the Federal Reserve Bank of Atlanta’s wage tracker. The wages are nominal and not adjusted for inflation.
Americans will be filing their tax year 2023 returns during the upcoming tax season. In early 2025, they’ll be filing their 2024 returns using the brackets that the IRS just announced.
Read also: You can save up to $23,000 in your 401(k) next year, IRS says
In 2025, Americans will also be facing the end of many tax rules that went into effect under the Trump administration’s 2017 Tax Cuts and Jobs Act. The sweeping law reduced marginal tax rates on five of the seven tax brackets and it nearly doubled the standard deduction.
For now, those amounts are slated to expire at the end of 2025 and it’s difficult to say what the tax landscape will look like. But here’s what taxpayers can plan for with their 2024 returns.
Keep in mind that most people do not fall into just one tax bracket. They fall under multiple tax brackets, progressively taxed at higher rates.
Also remember tax brackets do not reflect a person’s final tax bill. The process still includes applying tax credits — like the child tax credit for families, the premium tax credit linked to healthcare or electric-vehicle credits — to get to that point.
2024 income tax brackets
| Single | Taxable income | The tax is: |
| 10% | $0 to $11,600 | 10% of the taxable income |
| 12% | Over $11,600 to $47,150 | $1,160 plus 12% above $11,600 |
| 22% | Over $47,150 to $100,525 | $5,426 plus 22% above $47,150 |
| 24% | Over $100,525 to $191,950 | $17,168.50 plus 24% above $100,525 |
| 32% | Over $191,950 to $243,725 | $39,110.50 plus 32% above $191,150 |
| 35% | Over $243,725 to $609,350 | $55,678.50 plus 35% above $243,725 |
| 37% | Over $609,350 | $183,647.25 plus 37% above $609,350 |
| Married Filing Jointly | Taxable income | The tax is: |
| 10% | $0 to $23,200 | 10% of the taxable income |
| 12% | Over $23,200 to $94,300 | $2,320 plus 12% above $23,200 |
| 22% | Over $94,300 to $201,050 | $10,852 plus 22% above $94,300 |
| 24% | Over $201,050 to $383,900 | $34,337 plus 24% above $201,050 |
| 32% | Over $383,900 to $487,450 | $78,221 plus 32% above $383,900 |
| 35% | Over $487,450 to $731,200 | $111,357 plus 35% above $487,450 |
| 37% | Over $731,200 | $196,669.50 plus 37% above $731,200 |
| Head of Household | Taxable income | The tax is: |
| 10% | $0 to $16,550 | 10% of the taxable income |
| 12% | Over $16,550 to $63,100 | $1,655 plus 12% above $16,550 |
| 22% | Over $63,100 to $100,500 | $7,241 plus 22% above $63,100 |
| 24% | Over $100,500 to $191,950 | $15,469 plus 24% above $100,500 |
| 32% | Over $191,950 to $243,700 | $37,417 plus 32% above $191,150 |
| 35% | Over $243,700 to $609,350 | $53,977 plus 35% above $243,700 |
| 37% | Over $609,350 | $181,954.50 plus 37% above $609,350 |
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