The IRS recently announced a host of tax year 2024 annual inflation adjustments as well as changes to contribution limits for retirement accounts. Here are a few of the most important updates.

Standard Deduction Increases

The standard deduction will rise to $29,200 for married couples filing jointly and $14,600 for single filers and married couples filing separately.

The standard deduction is a specific dollar amount that reduces taxable income. Learn more about the deduction at this IRS link.

Marginal Rates Steady, Brackets Adjusted for Inflation

The top tax rate is still 37% for married couples filing jointly with income greater than $731,000 ($609,350 for single filers). The other rates are:

• 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
• 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
• 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
• 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
• 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
• 10% for incomes of less than $11,600 (less than $23,200 for married couples filing jointly)

These tax rates are set to expire at the end of 2025, when the 2017 Tax Cuts and Jobs Act (TCJA) sunsets. At that point, income tax brackets are scheduled to revert to their pre-TCJA levels, which would set the top tax bracket at 39.6%.

No Changes to Personal Exemption

The personal exemption for 2024 remains at zero. The elimination of the exemption was a provision of the TCJA, which also removed limits on itemized deductions. More details on TCJA reforms are available at the IRS website.

Gift Exclusion Rises

The annual gift exclusion will increase by $1,000 to $18,000. The annual gift exclusion is the amount of money one person may transfer to another each year without incurring a gift tax.

[RELATED: How the Annual Gift Tax Exclusion Can be a Powerful Estate Planning Tool]

Contribution Limits Up for Retirement Plans, IRAs

The contribution limit for employees who participate in the Thrift Savings Plan, as well as in 401(k), 403(b), and most 457 plans, has gone up $500, to $23,000. Catch-up contributions for employees 50 and over will be $30,500 in 2024.

The limit on annual contributions to an Individual Retirement Arrangement (IRA) increased to $7,000. Taxpayers age 50 or over can contribute an additional $1,000 for a total contribution of $8,000.

The income ranges for determining eligibility to make deductible contributions to traditional IRAs and to make contributions to Roth IRAs have increased. Those who file jointly and make $230,000 or less can make a fully deductible contribution to a traditional IRA if a spouse is covered by a retirement plan at work. Solo filers who make $77,000 or less can take a full deduction for their contribution to a traditional IRA.

Married taxpayers who file jointly and make $240,000 or more are not allowed to contribute to a Roth IRA. Single taxpayers who make $161,000 or more are prohibited from contributing to a Roth IRA.

Full information on the contribution/deduction limits can be found on the IRS website.

[RELATED: Is a ‘Backdoor Roth IRA’ Right for You?]

MOAA Resources

While MOAA does not provide individual tax advice, check out these tools to help with your financial needs:

• MOAA’s Finance page, which includes the latest articles, information about upcoming MOAA financial webinars, links to member-exclusive financial publications, and more.
• MOAA’s Military State Report Card and Tax Guide, which has a state-by-state breakdown of tax resources, including military- and veteran-specific information.
• MOAA’s Webinar Schedule and Archive, which offers Premium and Life members a full library of recorded webinars on multiple financial topics.