Small BusinessSmall Business NewsIRS releases 2024 inflation adjustments impacting small businesses

IRS releases 2024 inflation adjustments impacting small businesses

The Internal Revenue Service (IRS) recently issued a series of inflation adjustments that will affect more than 60 tax provisions for the 2024 fiscal year. Small business owners should note these developments since they might substantially influence their financial planning and tax strategy

Key Updates:

The Inflation Reduction Act, which preserves the financing rate for hazardous substances Superfund for crude oil and some petroleum products, is one of the significant adjustments for 2024. This change lowers the tax rate to $0.26 per share for crude oil or petroleum products entered after December 31, 2016.

In 2024, the standard deduction will increase, giving households some relief. The deduction for married couples filing jointly will increase by $1,500 in 2023 to $29,200. The standard deduction for taxpayers who are single or married but file separately will increase by $750 to $14,600. The deduction for heads of families will increase by $1,100 to $21,900.

Additionally, the maximum tax rate for single taxpayers making more than $609,350 and married couples filing jointly with incomes over $731,200 will remain at 37% for 2024. However, the following is how other marginal rates are adjusted:

  • 35% of earnings over $243,725 ($487,450 for joint-filing couples)
  • 32% of earnings over $191,950 ($383,900 for jointly filed married couples)
  • 24% of earnings over $100,525 ($201,050 for jointly filed married couples)
  • 22% of earnings over $47,150 ($94,300 for jointly filed married couples)
  • 12% on earnings over $11,600 ($23,200 for jointly filed married couples)
  • The lowest rate for single people making $11,600 or less is 10% ($23,200 for married couples filing jointly).

Other changes include: 

  • Salary reductions for employees under health flexible spending plans have a $3,200 limitation and a $640 carryover restriction.
  • Medical Savings Account requirements are adjusted, with minimum annual deductibles set at $2,800 for self-coverage and $5,550 for family coverage.
  • The foreign-earned income exclusion increases to $126,500.
  • The basic exclusion amount for estates of decedents who die during 2024 is now $13,610,000.
  • The gift exclusion for the year has been increased to $18,000.
  • As of right now, the maximum adoption credit is $16,810.

Did you know? ASBN America’s Small Business Network is now available to stream in over 70 million broadcasting households for users with Roku, Firestick, AppleTV, and mobile Android [download] and Apple IOS [download] devices.

ASBN Small Business NetworkASBN, from startup to success, we are your go-to resource for small business news, expert advice, information, and event coverage.

While you’re here, don’t forget to subscribe to our email newsletter for all the latest business news know-how from ASBN.

Jaelyn Campbell
Jaelyn Campbell
Jaelyn Campbell is a staff writer/reporter for ASBN. She is a recent honors cum laude graduate with a BFA in Mass Media from Valdosta State University. Jaelyn is an enthusiastic creator with more than four years of experience in corporate communications, editing, broadcasting, and writing. Her articles in The Spectator, her hometown newspaper, changed how people perceive virtual reality. She connects her readers to the facts while providing them a voice to understand the challenges of being an entrepreneur in the digital world.

Related Articles