As we enter the new year, families must stay informed about the latest tax changes. The transition from 2023 to 2024 brings several adjustments to tax brackets, retirement contributions, and Health Savings Accounts (HSAs) that can impact your financial planning. In this blog post, we will delve into these changes to help you confidently navigate your family’s financial landscape.
Tax Bracket Adjustments
The IRS often adjusts tax brackets to account for inflation. For 2024, we will see increases in the income thresholds for each tax bracket. This means you might fall into a different bracket than last year, potentially affecting your tax rate. Understanding where your income sits within these brackets is important to estimate your tax liability accurately.
For 2023 the lowest tax bracket for a married filer went up to $22,000 but in 2024 it will go up to $23,200. The tax rate of 10% will not change.
The next bracket, 12% will go from $22,001 to $89,450 in 2023 to $23,201 to $94,300.
To see the full 2024 tax tables download the PDF document linked above.
Retirement Contribution Changes
Retirement accounts, such as 401(k)s and IRAs will also see annual contribution limit adjustments. In 2024, these limits will increase, allowing individuals and families to contribute more towards their retirement savings. This is an excellent opportunity to bolster your long-term financial security.
If you are contributing and maxing out your contributions, be sure to updated your contribution amount in January.
Health Savings Account (HSA) Contribution Limits
HSAs are invaluable for families managing high-deductible health plans. The contribution limits for HSAs typically increase each year. In many cases they are the best way to save for the future.
For 2024, you will see an increase in HSA contribution limits. Be sure to plan accordingly.
Other Notable Changes
Apart from these key areas, there are several other tax-related changes that families should be aware of:
- Standard Deduction increases to $29,200 for a couple married filing joint
- Child Tax Credit: Unfortunately the child tax credit does not see a change
Navigating tax changes can be challenging, but staying informed helps make wise financial decisions for your family. We recommend consulting with a tax professional to understand how these changes impact your situation. Effective financial planning is key to managing your family’s fiscal health.