Comprehensive Key Numbers

<p>Comprehensive Key Numbers</p>

These days when we talk about inflation, we likely discuss how much more we have been paying for food and gasoline. But inflation also should factor into our tax and financial planning for 2024. The Internal Revenue Service has announced the 2024 inflation adjustments for more than 60 tax provisions, including tax rate schedules and other tax changes. There have also been cost-of-living adjustments for 2024 to Social Security, Medicare and Medicaid.

Key Takeaways

Here are a few of the major changes that could be beneficial to you: 

  • Expanded limits on retirement savings accounts: You will be able to contribute more to most types of retirement savings accounts in 2024. For example, the regular IRA and the Roth IRA maximum contribution increases from $6,500 to $7,000 in 2024. And the elective deferral limit for 401(k) plans, 403(b) plans and 457(b) plans increases for 2024 to $23,000, up from $22,500 for 2023.

  • Increased standard deduction: The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023.

  • A big jump for estate and gift tax exemptions: The basic lifetime exemption for estate, gift and generation-skipping transfer tax increases to $13,610,000 from $12,920,000 for decedents who died in 2023. That limit is scheduled to be halved by 2026.

  • Increased annual exclusion for gifts: The exclusion increases to $18,000 for calendar year 2024, up from $17,000 for calendar year 2023.

  • Higher alternative minimum exemption and phase-out limits: The tax exemption amount for 2024 is $85,000 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).

These are just a handful of potential savings opportunities. By using the information in this report and consulting with your tax advisor, you can begin planning now.

For more details, download a PDF of our summarized or full report.

Summarized Report Full Report

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