MEDIA ALERT: Wolters Kluwer details potential inflation adjusted impact for U.S. taxpayers in 2024

September 26, 2023 at 08:06 AM EDT

Go-to guidance on latest figures now available

An early glimpse of the U.S. income tax picture for 2024, as projected under current tax law, is now available from Wolters Kluwer Tax & Accounting (TAA). The new information includes estimated ranges for each 2024 tax bracket as well as projections for a growing number of inflation-sensitive tax figures, such as the standard deduction. These annual projections are based on the relevant inflation data recently reported by the U.S. Department of Labor.

Key Tax Savings, Inflation-Adjusted Projections for 2024

Projections based on the Department of Labor’s inflation figures for the 12-month period between August 31, 2022 and August 31, 2023 suggest most taxpayers will experience significant inflation-driven “tax cut” savings in comparison to their 2023 tax return filings. An example of how taxpayers will benefit on 2024 tax returns, when compared to 2023 tax returns based on the inflation adjustments provided under the current tax code, follows:

Because of the income ranges bracketing, the inflation adjustments will provide an effective “tax cut” by taxing more income at lower marginal tax rates. A single filer with taxable income of $50,000 should owe $254.50 less next year due to the adjustments to the income tax rate brackets between 2023 and 2024.

A married couple filing jointly with a total taxable income of $130,000 should pay $509 less income taxes for 2024 tax returns than they will on the same income for 2023 because of indexing of their tax brackets for 2024.

The additional standard deduction for those 65-years-old and older or who are blind will increase $50 to $1,550 for 2024 tax returns, with an increase of $100 to $1,950 for single aged 65 or older or blind filers.

Other Inflation-adjusted Tax Estimates for 2024

The standard deduction for single, married filing jointly, and married filing separately filers is expected to rise for 2024: at $14,600, $29,200 and $14,600, respectively, up from $13,850, $27,700 and $13,850. The standard deduction for heads of household is expected to rise $1,100 to $21,900 for 2024. Any increase in the standard deduction, of course, can produce lower taxes by decreasing the taxpayer’s taxable income.

The estate and gift tax applicable exemption was increased by the Tax Cuts and Jobs Act. The amount has been adjusted for inflation by Congress and is now projected at $13,610,000 for 2024. A spousal portability election can now effectively protect double that amount against estate and gift tax ($27,220,000 for 2024). The annual gift tax exclusion for 2024 is projected to increase to $18,000 for gifts to each recipient.

The 2024 foreign earned income exclusion will increase to $126,500 for 2024, up from $120,000 for 2023.

Wolters Kluwer Tax & Accounting 2024 Tax Projections*

As cited earlier, Wolters Kluwer TAA projections for indexed amounts are based on the relevant inflation data released by the U.S. Department of Labor. The IRS usually releases official numbers by November each year.

Tax bracket projections are provided for illustrative purposes only and should not be used for income tax returns or other federal income tax related purposes until confirmed by the IRS later this year and are subject to amendment by Congress during the rest of 2023, or even retroactively during 2024.

Married Filing Jointly (& Surviving Spouse)

Tax Rate	2024 Taxable Income	2023 Taxable Income
10%	$0 - $23,200	$0 – $22,000
12%	$23,201 – $94,300	$22,001 – $89,450
22%	$94,301 – $201,050	$89,451 – $190,750
24%	$201,051 – $383,900	$190,751 – $364,200
32%	$383,901 – $487,450	$364,201 – $462,500
35%	$487,451 – $731,200	$462,501 – $693,750
37%	$731,200+	$693,750+

Unmarried Individuals (Other Than Surviving Spouses and Heads of Households)

Tax Rate	2024 Taxable Income	2023 Taxable Income
10%	$0 – $11,600	$0 – $11,000
12%	$11,601 – $47,150	$11,001 – $44,725
22%	$47,151 – $100,525	$44,726 – $95,375
24%	$100,526 – $191,950	$95,376 – $182,100
32%	$191,951 – $243,725	$182,101– $231,250
35%	$243,726 – $609,350	$231,251 – $578,125
37%	$609,350+	$578,125+

Head of Household

Tax Rate	2024 Taxable Income	2023 Taxable Income
10%	$0 – $16,550	$0 – $15,700
12%	$16,551 – $63,100	$15,701 – $59,850
22%	$63,101 – $100,500	$59,851 – $95,350
24%	$100,501 – $191,950	$95,351 – $182,100
32%	$191,951 – $243,700	$182,101 – $231,250
35%	$243,701 – $609,350	$231,251 – $578,100
37%	$609,350+	$578,100+

Married Individuals Filing Separate Returns

Tax Rate	2024 Taxable Income	2023 Taxable Income
10%	$0 – $11,600	$0 – $11,000
12%	$11,601 – $47,150	$11,001 – $44,725
22%	$47,151 – $100,525	$44,726 – $95,375
24%	$100,526 – $191,950	$95,376 – $182,100
32%	$191,951 – $243,725	$182,101 – $231,250
35%	$243,726 – $365,600	$231,251 – $346,875
37%	$365,600+	$346,875+

Standard Deduction Amounts

Filing Status	2023	2024	Increase
Married Filing Jointly (& Surviving Spouse)	$27,700	$29,200	$1,500
Married Filing Separately	$13,850	$14,600	$750
Single	$13,850	$14,600	$750
Head of Household	$20,800	$21,900	$1,100

Standard Deduction for Dependents

2023	2024	Increase
$1,250	$1,300	$50

Gift Tax Exclusion

2023	2024	Increase
$17,000	$18,000	$1,000

* These numbers are projected for the 2024 tax year and have not been confirmed by the Internal Revenue Service (www.irs.gov). They are provided for illustrative purposes only and should not be used for income tax returns or other federal income tax related purposes until confirmed by the IRS later this year, and as subject to amendment by Congress during the rest of 2023, or even retroactively during 2024.

Inflation Adjustments - Background

Since the late 1980s, the U.S. Tax Code (Code) has required that federal income tax brackets be adjusted for inflation annually, and other inflation adjustments have been inserted into the Internal Revenue Code in recent years with increasing frequency. For example, the Code now requires over 50 other inflation-driven computations to determine deduction, credit and exclusion amounts in addition to the 50 separate computations needed to inflation-adjust the tax bracket schedules each year. Estimates for any of the inflation-adjusted tax figures for 2024, of course, are also necessarily subject to any changes to the tax law that may be made by Congress over the course of the next year.

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software, and services for professionals in healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, and corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services.

Wolters Kluwer reported 2022 annual revenues of €5.5 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 20,900 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

For more information, visit www.wolterskluwer.com, follow us on LinkedIn, Twitter, Facebook, and YouTube.

PLEASE NOTE: The content of this media alert is designed to provide accurate and authoritative information regarding the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering legal, accounting or other professional services.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230926162778/en/

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Shannon Wherry

Associate Director, External Communications

Wolters Kluwer Tax & Accounting

Office: +1 972-209-2767

shannon.wherry@wolterskluwer.com

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MEDIA ALERT: Wolters Kluwer details potential inflation adjusted impact for U.S. taxpayers in 2024

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