Stay on top of the latest cost-of-living changes from the IRS and Social Security Administration with this guide.
Every year, federal agencies like the Internal Revenue Service and Social Security Administration assess the impact of inflation and the current environment on their areas of oversight. Often, this results in cost-of-living adjustments (COLA), which change many tax thresholds, retirement contribution limits and other tax-advantaged plans that are inflation-adjusted by law.
To help you plan for the new year, here are key 2024 adjustments that could affect how you save, spend and invest. As you review these new numbers, we are available to discuss your financial strategy and any potential adjustments to consider.
In this article:
- Tax adjustments
- Retirement contribution limits
- Income phase-out ranges for Roth and traditional IRAs
- Health care account contribution limits
- Qualified charitable distribution (QCD) amounts
- Social Security
- Medicare
Tax adjustments
To keep in line with inflation, the IRS has raised income thresholds for all tax brackets and increased the standard deduction.
Income tax brackets – for taxable income in 2024
Income thresholds for tax brackets will increase by approximately 5.4% for 2024. Taxable income is calculated by subtracting your deductions from your adjusted gross income.
|
Tax bracket
|
Single
|
Married filing jointly
|
Head of household
|
Married filing separately
|
|
10%
|
$0–$11,600
|
$0–$23,200
|
$0–$16,550
|
$0–$11,600
|
|
12%
|
$11,600–$47,150
|
$23,200–$94,300
|
$16,550–$63,100
|
$11,600–$47,150
|
|
22%
|
$47,150–$100,525
|
$94,300–$201,050
|
$63,100–$100,500
|
$47,150–$100,525
|
|
24%
|
$100,525– $191,950
|
$201,050–$383,900
|
$100,500–$191,950
|
$100,525–$191,950
|
|
32%
|
$191,950–$243,725
|
$383,900–$487,450
|
$191,950–$243,700
|
$191,950– $243,725
|
|
35%
|
$243,725–$609,350
|
$487,450–$731,200
|
$243,700–$609,350
|
$243,725– $365,600
|
|
37%
|
$609,350+
|
$731,200+
|
$609,350+
|
$365,600
|
Please note: The tax brackets above are for the 2024 tax year. They are not used to calculate 2023 taxes.
General standard deduction
|
Filing status
|
2023
|
2024
|
|
Single
|
$13,850
|
$14,600
|
|
Married filing jointly
|
$27,700
|
$29,200
|
|
Head of household
|
$20,800
|
$21,900
|
|
Married filing separately
|
$13,850
|
$14,600
|
Additional standard deduction for those 65+ or blind
|
Filing status
|
2023
|
2024
|
|
Single / head of household
|
$1,850
|
$1,950
|
|
Married (joint, separate) or surviving household
|
$1,500
|
$1,550
|
Dependent standard deduction
|
|
2023
|
2024
|
|
Dependent with investment income only
|
$1,250
|
$1,300
|
|
Dependent with earned income
|
$1,250–$13,850
|
$1,300–$14,600
|
Estate tax exclusion amounts
|
2023
|
2024
|
|
$12.92 million
|
$13.61 million
|
Gift tax – annual exclusion
|
2023
|
2024
|
|
$17,000
|
$18,000
|
Retirement contribution limits
401(k), 403(b), 457 plan, Thrift Savings Plan
|
|
2023
|
2024
|
|
Elective deferral limit
|
$22,500
|
$23,000
|
|
Additional catch-up amount for employees 50+
|
$7,500
|
$7,500 (no change)
|
SIMPLE retirement plans
|
|
2023
|
2024
|
|
Elective deferral limit
|
$15,500
|
$16,000
|
|
Additional catch-up amount for individuals 50+
|
$3,500
|
$3,500 (no change)
|
IRAs (traditional IRAs and Roth IRAs)
For 2024, the total contributions you can make to any IRA (traditional or Roth) can’t be more than the following limits:
| |
2023
|
2024
|
|
Individuals
|
$6,500
|
$7,000
|
|
Additional catch-up amount for individuals 50+*
|
$1,000*
|
$1,000*
|
*Not subject to an annual cost-of-living adjustment.
Income phase-out ranges for Roth and traditional IRAs
The following are the modified adjusted gross income (MAGI) phase-out ranges for Roth IRAs and traditional IRAs.
MAGI phase-out range – for making contributions to Roth IRAs
|
|
2023
|
2024
|
|
Single/head of household
|
$138,000–$153,000
|
$146,000–$161,000
|
|
Married couple filing jointly
|
$218,000–$228,000
|
$230,000–$240,000
|
|
Married individual filing a separate return who makes contributions to a Roth IRA
|
$0–$10,000*
|
$0–$10,000*
|
*Not subject to an annual cost-of-living adjustment.
MAGI phase-out range – for making deductible contributions to Traditional IRAs, if covered by a plan at work
|
|
2023
|
2024
|
|
Single/head of household
|
$73,000–$83,000
|
$77,000–$87,000
|
|
Married couple filing jointly
|
$116,000–$136,000
|
$123,000–$143,000
|
|
Individual not covered by a workplace retirement plan but is married to someone who is covered
|
$218,000–$228,000
|
$230,000–$240,000
|
|
Married individual filing a separate return who is covered by a workplace retirement plan
|
$0–$10,000*
|
$0–$10,000*
|
*Not subject to an annual cost-of-living adjustment.
Health care account contribution limits
Health savings accounts (HSA)
|
|
2023
|
2024
|
|
Individual
|
$3,850
|
$4,150
|
|
Family
|
$7,750
|
$8,300
|
|
Catch-up (for those 55+)
|
$1,000*
|
$1,000*
|
*Not subject to an annual cost-of-living adjustment.
Health care flexible spending accounts (FSA)
|
|
2023
|
2024
|
|
Maximum
|
$3,050
|
$3,200
|
|
Carryover maximum
|
$610
|
$640
|
Qualified charitable distribution (QCD) amounts
|
|
2023
|
2024
|
|
Regular limit
|
$100,000
|
$105,000
|
Social Security
The coming year brings another cost-of-living adjustment (COLA) for Social Security, affecting approximately 71 million Americans, according to the Social Security Administration.1
|
|
2023
|
2024
|
|
COLA benefit increase
|
8.7%
|
3.2%
|
|
Maximum earnings subject to Social Security tax
|
$160,200
|
$168,600
|
Earnings limitations for retirees
Some retirees who have begun to collect Social Security retirement benefits choose to continue working. Individuals who are younger than full retirement age, collecting Social Security retirement benefits and continuing to work, will have some or all their Social Security benefits reduced if they earn more than certain dollar amounts.2
|
|
2023
|
2024
|
|
Earnings limit for workers who are younger than full retirement age (benefits reduced $1 for each $2 over the earnings limit)
|
$21,240
|
$22,320
|
|
Earnings limit for people in the year they reach their full retirement age in 2023/2024, but before the month of full retirement age (benefits reduced $1 for each $3 over the earnings limit)
|
$56,520
|
$59,520
|
Medicare
Medicare Part B premium and deductible amounts
|
|
2023
|
2024
|
|
Standard monthly premium
|
$164.90
|
$174.70
|
|
Annual deductible for all beneficiaries
|
$226
|
$240
|
Medicare Part A deductible and coinsurance amounts
|
|
2023
|
2024
|
|
Inpatient hospital deductible
|
$1,600
|
$1,632
|
|
Daily coinsurance for days 61–90
|
$400
|
$408
|
|
Daily coinsurance for lifetime reserve days
|
$800
|
$816
|
Let’s discuss how these changes may affect your financial strategy
We can walk you through how to take advantage of these changes considering your financial goals.