He Internal Revenue Service from the United States (IRSfor its acronym in English) announced significant changes to the tax brackets for tax year 2024, as set forth in the IRS Revenue Procedure issued on November 9, 2023. These changes will affect various tax aspects, including rates applicable to personal income and other key tax provisions.
The tax rate tables for fiscal year 2024 present substantial changes. For married taxpayers filing jointly and surviving spouses, the brackets and rates are as follows:
- No more than US$23,200: 10 percent of taxable income.
- More than $23,200 but not more than US$94,300: US$2,320 plus 12 percent of the surplus over US$23,200.
- More than US$94,300 but not more than US$201,050: US$10,852 plus 22 percent of the surplus over US$94,300.
- More than US$201,050 but not more than US$383,900: US$34,337 plus 24 percent of the surplus over US$201,050.
- More than US$383,900 but not more than US$487,450: US$78,221 plus 32 percent of the surplus over US$383,900.
- More than US$487,450 but not more than US$731,200: US$111,357 plus 35 percent of the surplus over US$487,450.
- More than US$731,200: US$196,669.50 plus 37 percent of the surplus over US$731,200.
These rates also apply to single taxpayers and heads of household, but with different limits and rates. For married taxpayers filing separately, rates vary even more.
Tax on hazardous substances returns in the United States
One of the most notable modifications comes from the Inflation Reduction Law of 2022, which reinstates the financing rate of the Hazardous Substances Superfund for crude oil received at refineries in the United States and petroleum products brought into the country for consumption, use or storage. This rate will be US$0.254 cents per barrel for the year 2023, adjusting for inflation in the year 2024.
In practical terms, this means that companies that import or refine crude oil in the United States will have to pay an additional fee for each barrel they receive or process. This fee will be used to finance the cleanup of sites contaminated by hazardous substances.
Tax credits and deductions relevant for 2024 in the United States
The IRS also announced adjustments to various tax credits and deductions for fiscal year 2024:
- Adoption credit: The credit allowed for the adoption of children with special needs is US$16,810, while the maximum credit for other adoptions is equal to the amount of qualified adoption expenses, capped at US$16,810. This credit begins to be reduced for modified income over $252,150 and is eliminated completely for income over $292,150.
- Child tax credit: The amount used to determine the amount of child tax credit that may be refundable is US$1,700.
- Earned Income Credit (EITC): new amounts are established to determine the earned income credit. These amounts vary depending on marital status and the number of qualifying children.
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These changes seek to adapt to the economic reality and adjust tax rates according to inflation and the needs of the country. Taxpayers should be aware of these modifications to ensure proper compliance with current tax laws.. Additionally, taxpayers are encouraged to consult additional guidance that may arise after November 9, 2023, in the event of additional amendments to the Tax Code for the year 2024.
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