2024 federal income tax brackets — how much will you pay? (2024)

The IRS has unveiled its annual inflation adjustments for the 2024 tax year, featuring a slight uptick in income thresholds for each bracket compared to 2023.

Below, CNBC Select breaks down the updated tax brackets for 2024 and what you need to know about them.

• 2024 tax brackets (for taxes filed in 2025)
• 2023 tax brackets (for taxes filed in 2024)
• What is a marginal tax rate?
• What is an effective tax rate?
• How do you reduce the amount of taxes you owe?
• Bottom line

The tax inflation adjustments for 2024 rose by 5.4% from 2023 (which is slightly lower than the 7.1% increase the 2023 tax year had over the 2022 rates).

In 2024, the top tax rate of 37% applies to those earning over $609,350 for individual single filers, up from $578,125 last year. Meanwhile, the lowest threshold of 10% applies to those making $11,600 or less, up from $11,000 in 2023.

That means how much you pay in taxes could be higher or lower this year than in 2023. For example, let's say you earned $45,000 in taxable income as a single filer in 2023. How your income is taxed gets broken down into three tax brackets:

• 10% for the first $11,000 of your income — which comes down to $1,100
• 12% for any income between $11,001 to $44,725 ($33,724) — which comes down to $4,046.88
• 22% for the remaining income between $44,726 to 95,375 ($274) — which comes down to $60.28
• This adds up to $5,207.16 in taxes for the 2023 calendar year.

Now, let's say you're earning $45,000 in 2024. Your tax bracket will look a little different.

• 10% for the first $11,600 of your income — which comes down to $1,160
• 12% for any income between $11,601 to $47,150 ($33,399) — which comes down to $4,007.88
• This adds up to $5,167.88 in taxes for the 2024 calendar year.

That's about $40 less in taxes in 2024 than in 2023.

Below, are the brackets and rates that apply to income earned in 2024.

Your marginal tax rate is the highest tax rate you pay on your income. Because the IRS taxes different tiers of your income at progressive rates, you'll never pay a single rate on all of your income.

For example, if you're a single filer who earned $70,000 in income in 2023, your marginal tax rate is 22% because you earned income that falls within the $44,276 to $95,375 tax bracket. But only $25,724 of your income ($70,000 - $44,27) is taxed at 22%. The taxable income you earned from $11,001 to $44,725 is taxed at 12%, and the income you earned up to $11,000 is taxed at 10%.

Effective tax rate refers to the average percentage of your taxable income that you owe in federal taxes. To calculate this amount, you divide how much you owe by your total taxable income.

Here's how this looks using the example of a single filer with $70,000 of taxable income:

• 10% for the first $11,000 of their income, or $1,100.
• 12% for any income between $11,001 to $44,725, or $4,046.88.
• 22% for any income between $44,726 and $70,000, or $5,560.28.

This adds up to $10,707.16 worth of taxes owed. When you divide that by $70,000 (the total taxable income), you get an effective tax rate of 15.29%.

If you want to reduce how much you owe in taxes, you can start by looking at any available tax credits you can claim. Tax credits offer a direct reduction in the amount of taxes you owe, providing a dollar-for-dollar decrease in your tax liability. So, for example, if you owe $2,000 in taxes and qualify for a $500 tax credit, your tax liability gets reduced to $1,500. You can find details on tax credit options on the IRS website, including:

• The Earned Income Tax Credit
• Child Tax Credit and Child and Dependent Care Tax Credit
• American Opportunity Tax Credit

While tax credits directly reduce your tax bill, tax deductions lower your taxable income by letting you subtract certain expenses or contributions from what the IRS can tax. These deductions can take the form of a standard deduction — a fixed amount reduction — or an itemized deduction — which entails listing eligible expenses. Deductions are based on expenses such as mortgage interest, charitable contributions or educational expenses.

For example, if you have student loans, qualified borrowers can deduct interest that they paid on those loans. You can also claim deductions for money contributed to a qualifying pre-tax retirement account, such as an employer-sponsored401(k) or traditional IRA. However, you'll be subject to income tax on your withdrawals.

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