Source: IRS.gov
Thompson Investment Management does not provide tax advice. Please consult your tax advisor.
ORDINARY TAX RATES AND BRACKETS
| Taxable Income | Pay | % on excess | Of the amount over: | |
| Single | $0 – 11,600 | $0 | 10% | $0 |
| 11,601 – 47,150 | 1,160 | 12% | 11,600 | |
| 47,151 – 100,525 | 5,426 | 22% | 47,150 | |
| 100,526 – 191,950 | 17,168.50 | 24% | 100,525 | |
| 191,951 – 243,725 | 39,110.50 | 32% | 191,950 | |
| 243,726 – 609,350 | 55,678.50 | 35% | 243,725 | |
| 609,351+ | 183,647.25 | 37% | 609,350 |
| Married Filing Jointly | $0 – $23,200 | $0 | 10% | $0 |
| 23,201 – 94,300 | 2,320 | 12% | 23,200 | |
| 94,301 – 201,050 | 10,852 | 22% | 94,300 | |
| 201,051 – 383,900 | 34,337 | 24% | 201,050 | |
| 383,901 – 487,450 | 78,221 | 32% | 383,900 | |
| 487,451 – 731,200 | 111,357 | 35% | 487,450 | |
| 731,201+ | 196,669.50 | 37% | 731,200 |
| Married Filing Separately | $0 – 11,600 | $0 | 10% | $0 |
| 11,601 – 47,150 | 1,160 | 12% | 11,600 | |
| 47,151 – 100,525 | 5,426 | 22% | 47,150 | |
| 100,526 – 191,950 | 17,168.50 | 24% | 100,525 | |
| 191,951 – 243,725 | 39,110.50 | 32% | 191,950 | |
| 243,726 – 365,600 | 55,678.50 | 35% | 243,725 | |
| 365,601+ | 98,334.75 | 37% | 365,600 |
| Head of Household | $0 – $16,550 | $0 | 10% | $0 |
| 16,551 – 63,100 | 1,655 | 12% | 16,550 | |
| 63,101 – 100,500 | 7,241 | 22% | 63,100 | |
| 100,501 – 191,950 | 15,469 | 24% | 100,500 | |
| 191,951 – 243,700 | 37,417 | 32% | 191,950 | |
| 243,701 – 609,350 | 53,977 | 35% | 243,700 | |
| 609,351+ | 181,954.50 | 37% | 609,350 |
| Estates and Non- Grantor Trusts | $0 – $3,100 | $0 | 10% | $0 |
| 3,101 – 11,150 | 310 | 24% | 3,100 | |
| 11,151 – 15,200 | 2,242 | 35% | 11,150 | |
| 15,201+ | 3,659.50 | 37% | 15,200 |
- The tax rate on long-term capital gains and qualified dividends is also based on a bracketed system using taxable income:
| Long-Term Cap Gain Tax Rate |
Single |
Married Filing Joint | Married Filing Separately | Head of Household | Estates/Non-Grantor Trusts |
| 0% | $0 – 47,025 | $0 – 94,050 | $0 – 47,025 | $0 – 63,000 | $0 – 3,150 |
| 15% | 47,026 – 518,900 | 94,051 – 583,750 | 47,026 – 291,850 | 63,001 – 551,350 | 3,151 – 15,450 |
| 20% | $518,901+ | $583,751+ | $291,851+ | $551,351+ | $15,451+ |
- In addition, married taxpayers with Modified AGI over $250,000 ($200,000 if Single; $125,000 if Married Filing Separately) and estates/non-grantor trusts in the top tax bracket are subject to an additional 3.8% tax on Net Investment Income.
STANDARD DEDUCTION / PERSONAL EXEMPTIONS
| 2024 | 2023 | |
| Single | $14,600 | $13,850 |
| Married, filing jointly | $29,200 | 27,700 |
| Married, filing separately | $14,600 | 13,850 |
| Head of Household | $21,900 | 20,800 |
| Additional deduction for age 65+ or blind – married | $1,550 | 1,500 |
| Additional deduction for age 65+ or blind – single | $1,950 | 1,850 |
ESTATE PLANNING
| Decedents Dying In: | Lifetime Exemption Amount | Tax Rate |
| 2023 | 12,920,000 | 40% |
| 2024 | 13,610,000 | 40% |
- Individuals may use the full $13,610,000 million exemption to make lifetime gifts without incurring gift tax (married couples up to $27,220,000). The 40% gift tax rate applies to gifts above the exemption amount.
- 2024 Annual Gift Tax Exclusion: $18,000
- 2024 Generation Skipping Tax: $13,610,000 / 40% tax rate.
RETIREMENT PLAN CONTRIBUTION LIMITS
| Traditional & Roth IRAs | 2024 | 2023 |
| IRA and Roth IRA regular contributions | $7,000 | $6,500 |
| IRA and Roth IRA catch-up contributions | 1,000 | 1,000 |
| MAGI phaseout range for IRA deduction – single (covered)
|
77,000-87,000 | 73,000-83,000 |
| MAGI phaseout range for IRA deduction – married (covered) | 123,000-143,000 | 116,000-136,000 |
| MAGI phaseout range for IRA deduction – married (non-covered)
|
230,000-240,000 | 218,000-228,000 |
| Roth IRA contribution MAGI range – single | 146,000-161,000 | 138,000-153,000 |
| Roth IRA contribution MAGI range – married | 230,000-240,000 | 218,000-228,000 |
- Catch-up contributions to IRAs and employer plans are available to taxpayers aged 50 and older by 12/31 of the current year.
- MAGI is defined as Adjusted Gross Income minus income from Roth conversions plus any deductions taken for: IRA contributions, student loan interest, excluded foreign income, excluded interest from savings bonds used for education, and excluded employer-provided adoption benefits, and more.
- For those not covered by an employer retirement plan but whose spouse is covered, the IRA deduction is phased out for MAGI between $230,000 and $240,000 for 2024 ($218,000 and $228,000 for 2023).
- If neither spouse is covered by a qualified plan, there is no phaseout range for Traditional IRA
| Employer Plans | 2024 | 2023 |
| 401(k), 403(b) regular contributions | $23,000 | $22,500 |
| 401(k), 403(b) catch-up contributions | 7,500 | 7,500 |
| Profit Sharing or MPP | 69,000 | 66,000 |
| Individual 401(k) (Salary Deferral + Profit Sharing) | 69,000 | 66,000 |
| Individual 401(k) (Salary Deferral + Profit Sharing) Including Age 50+ Catch-up | 76,500 | 73,500 |
| SIMPLE IRA regular contributions | 16,000 | 15,500 |
| SIMPLE IRA catch-up contributions | 3,500 | 3,500 |
| SEP plan contributions | 69,000 or 25% of income | 66,000 or 25% of income |
| Total Defined Contribution plan contributions | 69,000 | 66,000 |
| Maximum compensation for plan benefit | 345,000 | 330,000 |
SOCIAL SECURITY TAXES AND BENEFITS
| 2024 | 2023 | |
| Maximum wages subject to FICA tax | $168,600 | $160,200 |
| Maximum earned income before reduction in SS benefits (up to full retirement age) | 22,320 | 21,240 |
| Maximum SS benefit, retiring at full retirement age | 3,822/mo. | 3,627/mo. |
- Earned income above threshold, for taxpayers younger than full retirement age, results in reduced Social Security benefits. Benefit amount is reduced by $1 for every $2 over the $22,320 threshold.
| Taxability of Benefits | Single, Head of Household, Married Filing Separate | Married Filing Joint | Taxable Portion of Benefits |
| Income Level | $0 – 25,000 | $0 – 32,000 | 0% |
| 25,001 – 34,000 | 32,001 – 44,000 | Up to 50% | |
| Over 34,000 | Over 44,000 | Up to 85% |
- Income for purposes of this test includes: all income from investments, retirement plans, businesses, & all other Any tax-exempt interest included on line 2a of Form 1040. Half the gross Social Security benefit itself.