Your Standard Tax Deduction Could Be $1,500 More This Year

KEY TAKEAWAYS

• The IRS raised its standard deduction rates up $1,500 this year.
• It also adjusted all tax brackets so that the income limits are higher than they were last year.
• The agency updates these numbers every year based on inflation and cost of living.

There aren’t too many upsides to today’s elevated inflation, but here’s one possible silver lining: paying less federal income tax.

The IRS has raised the standard deduction for married couples filing jointly to $29,200, an increase of $1,500 from 2023, the agency said Thursday, in a move that will push tax bills lower.

It also released its tax brackets for 2024, and the income limits for each of them are higher than last year. That means that all else being equal, you could pay a lower marginal tax rate on some of your income. Income tax brackets are among the many dollar values the agency adjusts every year so that taxpayers don’t fall behind because of inflation reducing the value of the dollar.

In addition to raising the tax brackets, the agency raised contribution limits for 401ks, giving a boost to retirement savers.

Other inflation adjustments include:

• The Alternative Minimum Tax exemption amount rose to $85,700 from $81,300.
• The maximum earned income tax credit for people with three or more children rose to $7,830 from $7,430.