Understanding 2024 Tax Brackets and Retirement Changes

Navigating the New Landscape: Understanding 2024 Tax Brackets and Retirement Changes

As we step into the new year, it’s crucial to stay informed about the latest financial changes that can impact financial planning. One of the most significant announcements for 2024 is the adjustment of tax rate schedules and retirement account limits by the Internal Revenue Service. At DeWitt & Dunn Financial Services, we’re committed to guiding you through these changes, allowing you to make informed decisions for your financial future. Let’s dive into the important details of the 2024 tax brackets and what they mean for your financial planning. 

Breakdown of the 2024 Tax Brackets 

Gaining a clear understanding of the 2024 tax brackets, as outlined below hold significant implications whether you’re filing as a single individual or jointly with your spouse. 

For married couples filing jointly, the brackets start at a 10% tax rate for the first $23,200 of your taxable income. Notably, the highest bracket, taxed at 37%, now begins at $731,200, encompassing all income above this threshold. This structured approach ensures that each portion of your income is taxed at its respective rate, offering a more transparent and predictable tax planning process. 

If you’re a single filer, the IRS has also made significant adjustments in your favor. The tax rates start at 10% for the first $11,600 of your taxable income, with the 37% bracket kicking in at $609,350. This adjustment means that an additional $600 of your income will fall into the lower 10% tax bracket, compared to being taxed at 12% in the previous year. This shift provides a slight relief and emphasizes the importance of understanding how these 2024 tax brackets can affect your overall tax liability. 

37% for incomes over $609,350 ($731,200 for married couples filing jointly) 

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). 

Moreover, we designed these updated tax brackets to reflect changes in the economy and cost of living. This ensures that inflation and economic conditions do not disproportionately tax you. By familiarizing yourself with these new brackets, you can more accurately estimate your tax liabilities and plan your finances more confidently.  

Retirement Plan Adjustments 

The Internal Revenue Service has announced key changes for 2024 that are set to impact your financial planning, particularly in 401(k) contributions. Excitingly, you can now contribute up to $23,000 to your 401(k) plans, up from the $22,500 limit in 2023. Additionally, this increase is an excellent opportunity to boost your retirement savings, allowing you to secure a better financial future in a tax-advantaged way.

Furthermore, for 401(k), 403(b), and most 457 plans, participants 50 and older can now contribute up to $30,500, thanks to a steady catch-up limit of $7,500. These adjustments, including those under the SECURE 2.0 Act, are pivotal for your long-term financial security. 

Moreover, the 2024 landscape for Individual Retirement Accounts (IRAs) and retirement plans sees encouraging changes. The contribution limit for IRAs has risen to $7,000, up from $6,500, offering you the chance to save more for retirement. Additionally, the catch-up contribution limit for those aged 50 and over remains at $1,000 for IRAs allowing for $8,000 contribution.  

Additional Considerations for Savers 

The 2024 financial landscape introduces more opportunities for savers: 

  • The income limit for the Saver’s Credit, aimed at low- and moderate-income workers, rises to $76,500 for joint filers, $57,375 for heads of household, and $38,250 for singles and separate filers. 
  • SIMPLE retirement account contributions can now be up to $16,000, a boost from $15,500. 
  • The SECURE 2.0 Act adjustments include a Qualified Longevity Annuity Contract (QLAC) limit of $200,000. There is also an increased deductible limit for charitable distributions, now set at $105,000.

Get the Most Financially Out of 2024 

Navigating the complexities of the 2024 financial changes can be daunting, but you don’t have to do it alone. Additionally, with Cathy from DeWitt & Dunn by your side, you’ll have expert guidance to make the most of these new opportunities. Whether maximizing your retirement contributions or optimizing your tax strategy, Cathy’s expertise can make a significant difference. Don’t wait to secure your financial future. Contact DeWitt & Dunn today and take the first step towards a more prosperous and well-planned 2024. 


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