The Internal Revenue Service (IRS) announced a series of annual adjustments that will affect more than 60 tax provisions during fiscal year 2024. These modifications, detailed in Revenue Procedure 2023-34, range from marginal rates to specific tax benefits.
Regarding the adjustments in Revenue Procedure 2023-34, the standard deduction for married couples is increased, reaching US$29,200. This change will benefit married taxpayers, easing their tax burden and providing additional economic stimulus.
Marginal rates also see adjustments, keeping the top rate at 37 percent, while rates for different income ranges are adjusted for fiscal year 2024. These changes seek to maintain a progressive system that reflects the contributory capacity of citizens..
One of the most notable changes is the reintroduction of the Hazardous Substances Shallow Fund financing rate for crude oil at U.S. refineries, as set forth in the Inflation Reduction Act. This adjustment seeks to adapt fiscal policies to the economic reality of the country.
Another relevant aspect of the adjustments is the exemption from the Alternative Minimum Tax (AMT), established at US$85,700 for fiscal year 2024, with an elimination phase that begins at US$609,350. This adjustment aims to prevent middle and low-income taxpayers from being disproportionately affected by this type of tax..
Tax credits increase to support low and moderate income taxpayers
In the area of tax credits, the Earned Income Tax Credit (EITC) experiences an increasereaching a maximum amount of US$7,830 for fiscal year 2024. This measure seeks to support taxpayers with low and moderate incomes, providing significant relief.
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The Earned Income Tax Credit rises to $7,830, providing relief to low and moderate incomes
Transportation benefits and contributions to flexible health spending accounts also benefit from increased limits. These modifications seek to encourage the use of sustainable means of transportation and promote health care through flexible accounts.
Regarding the exclusion of foreign income, it is established at US$126,500 for fiscal year 2024, seeking to maintain a balance between the taxation of domestic and international income.
The basic deduction for inheritances and gifts experiences an increasereaching US$13,610,000 in 2024. This could have significant implications for estate planning and intergenerational wealth transmissions.
Other important adjustments include increases to the annual gift exclusion, the maximum adoption credit, and exclusions not affected by inflation. These changes seek to adapt the tax code to the economic and social evolution of the country.
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