Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
“`html
Understanding the New Standard Deductions for 2024
By O1ne Mortgage
What Is the Standard Deduction for 2024?
The IRS has increased the standard deductions for the 2024 tax year by approximately 5% over 2023 levels. These changes will affect your taxes when you file in 2025. The new standard deductions are as follows:
- Single and Married Filing Separately: $14,600
- Head of Household: $21,900
- Married Filing Jointly: $29,200
How Does the Standard Deduction Work?
The standard deduction is a set amount you can subtract from your adjusted gross income to reduce your taxable income. This deduction varies based on your filing status:
- Single
- Head of Household
- Married Filing Jointly
- Married Filing Separately
Claiming the standard deduction simplifies tax filing as it doesn’t require itemizing individual deductions like mortgage interest or charitable donations. It also makes a portion of your income tax-free.
How Much Can I Save With the New Standard Deduction?
The increased standard deductions for 2024 can lead to significant tax savings. For example, single taxpayers can save up to $277, while married couples can save up to $555. Your actual savings will depend on your filing status, tax bracket, and any changes in your income.
Potential Savings for Single Filers in 2024
| Rate | Tax Bracket | Potential Savings |
|---|---|---|
| 10% | $0 to $11,600 | Up to $75 |
| 12% | $11,601 to $47,150 | Up to $90 |
| 22% | $47,151 to $100,525 | Up to $165 |
| 24% | $100,526 to $191,950 | Up to $180 |
| 32% | $191,951 to $243,725 | Up to $240 |
| 35% | $243,726 to $609,350 | Up to $262.50 |
| 37% | Over $609,350 | Up to $277.50 |
Potential Savings for Married Couples in 2024
| Rate | Tax Bracket | Potential Savings |
|---|---|---|
| 10% | $0 to $23,200 | Up to $150 |
| 12% | $23,201 to $94,300 | Up to $180 |
| 22% | $94,301 to $201,050 | Up to $330 |
| 24% | $201,051 to $383,900 | Up to $360 |
| 32% | $383,901 to $487,450 | Up to $480 |
| 35% | $487,451 to $731,200 | Up to $525 |
| 37% | Over $731,200 | Up to $555 |
When Should You Claim the Standard Deduction?
Claim the standard deduction when your itemized deductions don’t exceed the standard deduction amount. Common itemized deductions include:
- Mortgage interest
- Medical and health care expenses
- State and local taxes
- Charity donations
If your itemized deductions are low or non-existent, the standard deduction is an easy choice. You automatically qualify for the full standard deduction for your filing status.
When Should You Itemize?
Itemize your deductions if they exceed the standard deduction. This requires tracking and documenting your expenses and ensuring compliance with IRS requirements. While itemizing involves more work, the potential tax savings can be substantial.
Who Can’t Claim the Standard Deduction?
Some taxpayers are not eligible to claim the standard deduction, including those who:
- Are married filing separately and their spouse itemizes deductions
- Were nonresident aliens or dual-status aliens during the tax year
- Are filing a return for a period of less than 12 months due to a change in their annual accounting period
- Are filing as an estate or trust, common trust fund, or partnership
The Bottom Line
The new standard deductions for 2024 will impact your taxes when you file in 2025. These adjustments help align standard deductions with the cost of living and rising incomes. To explore your options, consider using tax preparation software or consulting a tax professional.
For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey with ease and confidence.
“`
