By the numbers: Charting key federal tax changes for 2024


It’s crucial to stay abreast of the latest updates shaping the tax landscape for 2024. From adjustments in Social Security and Medicare tax wage bases to changes in Individual Retirement Account (IRA) contribution limits, the terrain is undergoing shifts that can significantly impact individual planning strategies. Below is a list of key updates ranging from retirement accounts to driving deductions, providing a roadmap for navigating this year’s tax environment.

 

Social Security/ Medicare20242023
Social Security Tax Wage Base$168,600$160,200
Medicare Tax Wage BaseNo limitNo limit
Employee portion of Social Security6.2%6.2%
Employee portion of Medicare1.45%1.45%
Individual Retirement Accounts20242023
Roth IRA Individual, up to 100% of earned income$7,000$6,500
Traditional IRA Individual, up to 100% of earned Income$7,000$6,500
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older$1,000$1,000
Qualified Plan Limits20242023
Defined Contribution Plan limit on additions (Sections 415(c)(1)(A))$69,000$66,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))$275,000$265,000
Maximum compensation used to determine contributions$345,000$330,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2))$23,000$22,500
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older$7,500$7,500
SIMPLE deferrals (Section 408(p)(2)(A))$16,000$15,500
SIMPLE additional “catch-up” contributions for employees age 50 and older$3,500$3,500
Compensation defining highly compensated employee (Section 414(q)(1)(B))$155,000$150,000
Compensation defining key employee (officer) in a top-heavy plan
$220,000$215,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))$750$750
Driving Deductions20242023
Business mileage, per mile67 cents65.5 cents
Charitable mileage, per mile14 cents (the rate is set by statute)14 cents (the rate is set by statute)
Medical and eligible moving*, per mile21 cents22 cents
Business Equipment20242023
Maximum Section 179 deduction$1.22 million$1.16 million
Phase out for Section 179$3.05 million$2.89 million
Business Meals20242023
General deduction for eligible business-related food and beverage expenses50%50%
Transportation Fringe Benefit Exclusion20242023
Monthly commuter highway vehicle and transit pass$315$300
Monthly qualified parking$315$300
Standard Deduction20242023
Married filing jointly$29,200$27,700
Single (and married filing separately)$14,600$13,850
Heads of Household$21,900$20,800
Domestic Employees20242023
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.$2,700$2,600
Kiddie Tax
20242023
Amount used to reduce the net unearned income reported on a child’s return that’s subject to the Kiddie Tax$1,300$1,250
Estate Tax20242023
Federal estate tax exemption$13.61 million$12.92 million
Maximum estate tax rate40%40%
Annual Gift Exclusion20242023
Amount you can give each recipient$18,000$17,000
Alternative Minimum Tax exemption20242023
Married filing jointly$133,300
and begins to phase out at $1,218,700
$126,500
and begins to phase out at $1,156,300
Single
$85,700
and begins to phase out at $609,350
$81,300
and begins to phase out at $$578,150

* Only available for active-duty members of the military.