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/ Medicare | 2024 | 2023 |
| Social Security Tax Wage Base | $168,600 | $160,200 |
| Medicare Tax Wage Base | No limit | No limit |
| Employee portion of Social Security | 6.2% | 6.2% |
| Employee portion of Medicare | 1.45% | 1.45% |
| Individual Retirement Accounts | 2024 | 2023 |
| 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 Limits | 2024 | 2023 |
| 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 Deductions | 2024 | 2023 |
| Business mileage, per mile | 67 cents | 65.5 cents |
| Charitable mileage, per mile | 14 cents (the rate is set by statute) | 14 cents (the rate is set by statute) |
| Medical and eligible moving*, per mile | 21 cents | 22 cents |
| Business Equipment | 2024 | 2023 |
| Maximum Section 179 deduction | $1.22 million | $1.16 million |
| Phase out for Section 179 | $3.05 million | $2.89 million |
| Business Meals | 2024 | 2023 |
| General deduction for eligible business-related food and beverage expenses | 50% | 50% |
| Transportation Fringe Benefit Exclusion | 2024 | 2023 |
| Monthly commuter highway vehicle and transit pass | $315 | $300 |
| Monthly qualified parking | $315 | $300 |
| Standard Deduction | 2024 | 2023 |
| Married filing jointly | $29,200 | $27,700 |
| Single (and married filing separately) | $14,600 | $13,850 |
| Heads of Household | $21,900 | $20,800 |
| Domestic Employees | 2024 | 2023 |
| Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. | $2,700 | $2,600 |
| Kiddie Tax | 2024 | 2023 |
| 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 Tax | 2024 | 2023 |
| Federal estate tax exemption | $13.61 million | $12.92 million |
| Maximum estate tax rate | 40% | 40% |
| Annual Gift Exclusion | 2024 | 2023 |
| Amount you can give each recipient | $18,000 | $17,000 |
| Alternative Minimum Tax exemption | 2024 | 2023 |
| 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.
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