On April 30, 2021, the Internal Revenue Service (IRS) revealed new income tax brackets that will take effect for the 2024 tax year. The new 2020-2024 tax brackets are the result of the Tax Cuts and Jobs Act of 2017, which replaced the prior marginal rate structure with seven new tax brackets.
For the 2024 tax year, the new tax brackets will apply for single taxpayers and married couples filing separately.
* Tax rate for incomes up to $9,950: 10%
* Tax rate for incomes between $9,950 and $40,525: 12%
* Tax rate for incomes between $40,525 and $86,375: 22%
* Tax rate for incomes between $86,375 and $164,925: 24%
* Tax rate for incomes between $164,925 and $321,450: 32%
* Tax rate for incomes between $321,450 and $408,200: 35%
* Tax rate for incomes over $408,200: 37%
The tax rate for two married couples who file jointly will remain the same as the 2020 tax brackets, with the first bracket starting at double the 2020 rate ($19,900), and the highest bracket ending at double the 2020 rate ($612,350).
In addition, the new 2020-2024 tax brackets incorporate a few other changes, including an increased standard deduction, an increased contribution limit for retirement plans, and an increase in the child tax credit.