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? ›

For 2024, the standard tax deduction for single filers was raised to $14,600, a $750 increase from 2023. For those married and filing jointly, the standard deduction increased to $29,200, up $1,500 from the previous year, while the standard deduction for head-of-household filers increased $1,100 to $21,900.

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.

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.

The average refund was $3,011 through April 5, compared to $2,878 for refunds processed through April 7, 2023 — a 4.6% increase.

If a taxpayer refund isn't what is expected, it may be due to changes made by the IRS. These changes could include corrections to the Child Tax Credit or EITC amounts or an offset from all or part of the refund amount to pay past-due tax or debts. More information about reduced refunds is available on IRS.gov.

The updated 2024 income tax withholding tables have new withholding amounts to adjust for inflation. Adjust your payroll tax withholding to reflect annual changes to income tax withholding tables. If you use online payroll software, the information automatically updates.

The main thing that changes when you change tax brackets is the tax rates that apply to your taxable income to determine your tax liability. Moving into a higher tax bracket typically increases the amount you'll owe, and the opposite is true for moving to a lower tax bracket.

You really will take home more money in each paycheck. When an increase in income moves you into a higher tax bracket, you only pay the higher tax rate on the part of your income that falls into that bracket. You don't pay a higher rate on all of your income.

What is the average tax refund for $75000? ›

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.

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.

Under-withholding from Your Paycheck

Under-withholding is the #1 reason individuals owe taxes. This occurs when not enough tax is taken out of your paychecks throughout the year. If you haven't updated your W-4 form after a major life change, income adjustment, or second job, you might find yourself in this situation.

The more children you have, the larger the potential credit. In 2024, the maximum EITC ranges from $632 for someone with no children to $7,830 for a family with 3 or more dependent children. The size of your credit depends on your adjusted gross income too.

As projected by SHRM, employees can expect an average base salary increase of 3.5% in 2024 – down from 3.8% in 2023. A survey by PayScale, businesses are planning to maintain salary increases of 3.8 percent on average in 2024.

Other reasons that your paycheck might get bigger is if you: Maxed out your 401k contributions for the year. Have earnings over the Social Security maximum taxable earnings for the year ($160,200 for 2023) Contributed the maximum amount to your health savings account (HSA)

One common reason for owing taxes is inadequate withholding throughout the year. Review your W-4 form and consider adjusting your withholding allowances by contacting your employer.