The Internal Revenue Service (IRS) has announced the annual inflation adjustments to tax brackets for 2024, bringing potential relief to certain American taxpayers. These changes are aimed at preventing workers from being pushed into higher tax brackets due to inflation, ensuring their purchasing power remains unaffected. While the 5.4% adjustment for 2024 is smaller compared to the 7.1% increase in 2023, it represents a more significant boost than the 3.1% change witnessed in 2022.

One positive aspect of the new tax brackets is that some taxpayers may owe less to the IRS, even if they have earned more income. For example, a person with a taxable income of $95,000 in 2023, who receives a 3% pay raise to $97,850 in 2024, would see their tax bracket drop from 24% to 22%.

The highest tax rate for 2024 remains at 37% for single individuals earning over $609,350, or $731,200 for married couples filing jointly. This represents an increase from the previous year's thresholds of $578,125 for individuals and $693,750 for married couples filing jointly.

Here are the other tax brackets for 2024:

- 35% tax rate for single taxpayers with income exceeding $243,725, or $487,450 for married couples, up from $231,250 and $462,500 respectively in 2023.

- 32% tax rate for individuals earning above $191,950, or $383,900 for married couples, an increase from $182,100 and $364,200 last year.

- 24% tax rate for taxpayers with incomes over $100,525, or $201,050 for married couples, up from $95,375 and $190,750 in 2023.

- 22% tax rate for individuals earning over $47,150, or $94,300 for married couples, compared to $44,725 and $89,450 in the previous year.

- 12% tax bracket now applicable to taxpayers with earnings exceeding $11,600, or $23,200 for married couples, up from $11,000 and $22,000 respectively in 2023.

- 10% tax rate for individuals with incomes of $11,600 or less, or $23,200 or less for married couples, compared to $11,000 and $22,000 in the prior year.

These adjustments reflect the IRS's efforts to keep tax brackets in sync with inflation, providing taxpayers with a fair and accurate representation of their economic standing. By preventing individuals from being disproportionately affected by inflation, the updated tax brackets are designed to maintain the balance between taxable income and purchasing power for American workers.

As the new tax brackets for 2024 come into effect, individuals and couples are encouraged to consult with tax professionals or utilize online tax preparation tools to assess the impact on their financial situations. Understanding the changes will enable taxpayers to take advantage of potential savings or plan their finances accordingly.

It is important to note that the information provided above pertains to the tax brackets and thresholds announced by the IRS for the year 2024. Any further updates or changes to tax laws should be monitored through official IRS announcements or guidance.