As the new tax year approaches, understanding the "IRS tax brackets 2024" is essential for planning your finances effectively. The Internal Revenue Service (IRS) annually adjusts tax brackets to account for inflation, impacting how much you owe in taxes.Â
Tax brackets are ranges of income that are taxed at specific rates. The U.S. federal income tax system is progressive, meaning that as your income increases, the rate at which you are taxed also increases. However, you only pay the higher rate on the income that falls within each bracket, not on your entire income.
For the tax year 2024, the IRS has maintained seven tax brackets. Here are the rates and the corresponding income ranges for different filing statuses:
10%:
Single filers: Up to $11,600
Married filing jointly: Up to $23,200
Head of household: Up to $17,000
12%:
Single filers: $11,601 to $47,150
Married filing jointly: $23,201 to $94,300
Head of household: $17,001 to $68,150
22%:
Single filers: $47,151 to $100,525
Married filing jointly: $94,301 to $201,050
Head of household: $68,151 to $136,300
24%:
Single filers: $100,526 to $191,950
Married filing jointly: $201,051 to $383,900
Head of household: $136,301 to $232,550
32%:
Single filers: $191,951 to $243,725
Married filing jointly: $383,901 to $487,450
Head of household: $232,551 to $389,300
35%:
Single filers: $243,726 to $609,350
Married filing jointly: $487,451 to $731,200
Head of household: $389,301 to $523,600
37%:
Single filers: Over $609,350
Married filing jointly: Over $731,200
Head of household: Over $523,600
Here's a key point to understand: you don't pay the same tax rate on your entire income. Instead, you pay the corresponding tax rate for each bracket as you move up the income ladder.
For example, let's say you're a single filer with a taxable income of $120,000. You'll pay:
10% on the first $11,600
12% on the amount between $11,601 and $47,150
22% on the amount between $47,151 and $100,000
24% on the amount between $100,001 and $120,000