IRS tax bracket changes could mean your paycheck is slightly bigger in 2024. Here's why (2024)

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As the new year kicks off, some workers could see a slightly bigger paycheck due to tax bracket changes from the IRS.

The IRS in November unveiled the federal income tax brackets for 2024, with earnings thresholds for each tier adjusting by about 5.4% higher for inflation.

While it's lower than the tax bracket changes for 2023, "it's still a pretty handsome increase," said certified financial planner Roger Stinnett, managing director of wealth planning for First Foundation Advisors in Irvine, California.

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If your wages are similar to last year, the 2024 tax bracket adjustment could result in a small paycheck increase, depending on your withholding, experts say.

Of course, prolonged higher costs can chip away at tax savings.

Annual inflation declined slightly in November, but many Americans are still feeling the pinch of elevated prices for housing, motor vehicle insurance and other day-to-day expenses.

Keep a 'running total' of your income

"You always want to keep a running total in your mind of how your income is changing, because it's complex," said Stinnett, who is also a certified public accountant.

The federal income tax brackets show how much you owe on each portion of your "taxable income," which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

For 2024, the standard deduction also increased for inflation, rising to $14,600 for single filers, up from $13,850 in 2023. Married couples filing jointly may claim $29,200, up from $27,700. That change could reduce taxable income for some filers.

Check your paycheck withholding

Your federal and state paycheck withholdings affect how much taxes you pay throughout the year. You can expect a refund when you've overpaid or a tax bill when you haven't paid enough.

Even if your paycheck increased in 2024, "new tax changes could still place you in a lower or higher bracket," warned CFP Ashton Lawrence, director at Mariner Wealth Advisors in Greenville, South Carolina.

It's important to keep track of tax law and life changes that may affect your situation and adjust your paycheck withholding via Form W-4 with your employer as needed, he said.

Life changes that can affect your taxes may include marriage, divorce, the birth or adoption of a child, retirement, buying a home, filing for bankruptcy and more, according to the IRS.

One "quick check" could be last year's tax return, Stinnett said. If you had a large refund or owed a sizable balance, that may signal it's time to review your withholding.

IRS tax bracket changes could mean your paycheck is slightly bigger in 2024. Here's why (1)

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IRS tax bracket changes could mean your paycheck is slightly bigger in 2024. Here's why (2024)

FAQs

IRS tax bracket changes could mean your paycheck is slightly bigger in 2024. Here's why? ›

2024 standard deduction

Why is my paycheck bigger in 2024? ›

As the new year kicks off, some workers could see a slightly bigger paycheck due to tax bracket changes from the IRS. The IRS in November unveiled the federal income tax brackets for 2024, with earnings thresholds for each tier adjusting by about 5.4% higher for inflation.

How does tax bracket affect paycheck? ›

Tax brackets show you the tax rate you will pay on each portion of your taxable income. For example, if you are single, the lowest tax rate of 10% is applied to the first $11,000 of your taxable income in 2023. The next chunk of your income is then taxed at 12%, and so on, up to the top of your taxable income.

Will tax returns be bigger in 2024 IRS? ›

For instance, at this time last year, the typical refund was 11% lower than in 2022, IRS data shows. The rebound in 2024's average refund size is due to the IRS' adjustment of many tax provisions for inflation.

What will be the tax brackets for 2024? ›

Tax brackets 2024 (taxes due April 2025)
Tax rateSingleMarried filing jointly
10%$0 to $11,600$0 to $23,200
12%$11,601 to $47,150$23,201 to $94,300
22%$47,151 to $100,525$94,301 to $201,050
24%$100,526 to $191,950$201,051 to $383,900
3 more rows
3 days ago

Why is my refund so low in 2024? ›

You may be in line for a smaller tax refund this year if your income rose in 2023. Earning a lot of interest in a bank account could also lead to a smaller refund. A smaller refund isn't necessarily terrible, since it means you got paid sooner rather than loaning the IRS money for no good reason.

Will we see more in our paychecks in 2024? ›

Depending on your withholdings, and if you're set to make roughly what you made last year, you could see a small increase in your paychecks in 2024.

At what income do you go into a higher tax bracket? ›

2024 federal income tax brackets
Tax rateSingle filersMarried filing jointly
24%$100,525 - $191,950$201,050 - $383,900
32%$191,950 - $243,725$383,900 - $487,450
35%$243,725 - $609,350$487,450 - $731,200
37%$609,350 or more$731,200 or more
3 more rows
Feb 27, 2024

What salary puts you in a higher tax bracket? ›

2021 Tax Brackets (Due April 15, 2022)
Tax rateSingle filersMarried filing separately
10%$0 – $9,950$0 – $9,950
12%$9,951 – $40,525$9,951 – $40,525
22%$40,526 – $86,375$40,526 – $86,375
24%$86,376 – $164,925$86,376 – $164,925
3 more rows

Is your tax bracket determined per paycheck? ›

The IRS looks at how much total income you have received in the tax year and that is how they determine your tax bracket.

What are the new tax changes for 2024? ›

For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

How to get $7000 tax refund? ›

Requirements to receive up to $7,000 for the Earned Income Tax Credit refund (EITC)
  1. Have worked and earned income under $63,398.
  2. Have investment income below $11,000 in the tax year 2023.
  3. Have a valid Social Security number by the due date of your 2023 return (including extensions)
Apr 12, 2024

At what age is social security no longer taxed? ›

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

Will standard deduction change in 2024? ›

In 2024, the standard deduction is $14,600 for single filers and those married filing separately, $29,200 for those married filing jointly, and $21,900 for heads of household. The 2024 standard deduction applies to tax returns filed in 2025. $14,600.

What is the EIC credit for 2024? ›

Earned income tax credit 2024

For the 2024 tax year (taxes filed in 2025), the earned income credit will range from $632 to $7,830, depending on your filing status and the number of children you have.

How much federal tax should I pay on $50,000? ›

If you are single and a wage earner with an annual salary of $50,000, your federal income tax liability will be approximately $5700. Social security and medicare tax will be approximately $3,800. Depending on your state, additional taxes my apply.

Did payroll taxes change in 2024? ›

For 2024, the Social Security tax wage base for employees will increase to $168,600. The Social Security tax rate for employees and employers remains unchanged at 6.2% on wages up to $168,600.

Why is my paycheck suddenly higher? ›

If you find that your paycheck is larger than usual, there might have been an error. In some cases, your employer may have mistakenly: Withheld less than you've indicated on your W-4 form. Marked you as exempt for federal, state, or local taxes.

Why are my paychecks bigger at the end of the year? ›

You didn't receive a raise in 2023, but you may have noticed that you're receiving a slightly different amount of money in your paycheck. The IRS increased 2024 tax brackets, which could translate into more money on payday for some folks.

Why do I owe so much in taxes in 2024? ›

There are a lot of variables that affect your refund or tax due including how much you earned, how much tax you had withheld, your filing status, the number of dependents you claim, your deductions and credits, etc. You may have lost Earned Income Credit or the Child Tax Credit— did a child turn 17?

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