In an effort to continue simplifying the US tax code, the Internal Revenue Service (IRS) recently announced new income tax brackets for 2024. The proposed taxation regime will be effective for the tax year 2024, and will provide more equitable taxation for all Americans than the existing brackets.
Under the new income tax brackets, single taxpayers with adjusted gross incomes (AGI) of $30,000 or less will be subject to a 10% tax rate. Those earning between $30,001 and $41,500 will see a rate of 15%, while individuals earning up to $66,000 will pay 25%. Taxpayers earning more than $66,000 but less than $148,500 will be subject to a 28% rate. Those in the highest bracket, with AGIs of $148,501 or more, will have to pay a 33% federal tax rate.
The new income tax brackets are expected to help more Americans keep more of their hard-earned money in their paycheck. The altered brackets eliminate two taxable brackets that existed under the 2021 regulations, and reduce the number of rates from seven to five. This will make it easier for taxpayers to understand their rates, and simpler for them to file their taxes. Additionally, the new brackets provide a more progressive tax system for middle- and upper-income earners, as wealthier taxpayers are now subject to a higher tax rate than before.
The IRS is also looking into ways to make the filing process easier for individuals and businesses. Specifically, the agency is proposing ways to combine filing forms and streamline the process of collecting taxes. These changes, coupled with the new income tax brackets, could have a profound effect on how Americans interact with the US tax code.
Overall, the IRS’s announcement of new income tax brackets for 2024 is great news for individuals and businesses throughout the United States. It provides a simpler, more equitable system for taxpayers to follow, while helping more Americans keep more of their hard-earned money.