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2024 Inflation Adjustments for Personal Tax Planning

Client Alerts/Reports

The IRS has announced 2024 inflation adjustments for the following personal tax planning items.

Gift, Estate and Generation-Skipping Transfer (GST) Taxes 

The 2024 inflation adjustments for the gift, estate and GST tax exemptions provide an increase of almost $690,000 from 2023: 

  • Unified Gift and Estate Tax Exemption: For gifts made and estates of decedents dying in 2024, the exemption amount will increase to $13.61 million (up from $12.92 million in 2023).
  • GST Tax Exemption: The GST tax exemption also increases to $13.6 million in 2024 for GSTs (up from $12.92 million in 2023).  
  • Gift Tax Annual Exclusion: The gift tax annual exclusion increases to $18,000 for gifts made in 2024 (up from $17,000 in 2023).  
  • Annual Exclusion for Gifts to Non-U.S. Citizen Spouses: For 2024 gifts made to non-U.S. citizen spouses, the annual exclusion increases to $185,000 (up from $175,000 in 2023). 

Income Taxes 

Income Tax Brackets: The 2024 tax brackets for individuals as well as trusts and estates also have been adjusted upward.   

  • Married Joint Filers: The top tax rate of 37% applies to taxable income over $731,200 in 2024 (up from $693,750 in 2023).
  • Single Filers: The top tax rate of 37% applies to taxable income over $609,350 in 2024 (up from $578,125 in 2023).
  • Trusts and Estates: Trust and estates have a far more compressed tax bracket, and the top tax rate of 37% applies to taxable income over $15,200 in 2024 (up from $14,450 in 2023).

Capital Gains Thresholds: Below are the increased thresholds for application of the 15% capital gains tax rate. The 20% capital gains tax rate applies to adjusted net capital gains in excess of the 15% maximum amounts.

  • Married Joint Filers: The 15% capital gains tax rate applies to adjusted capital gains of more than $94,050 and up to $583,750 (up from $89,250 and $553,850 in 2023).
  • Single Filers: The 15% capital gains tax rate applies to adjusted capital gains of more than $47,025 and up to $518,900 (up from $44,625 and $492,300 in 2023).
  • Trusts and Estates: The 15% capital gains tax rate applies to adjusted capital gains of more than $3,150 and up to $15,450 (up from $3,000 and $14,650 in 2023).

The above are subject to change if Congress enacts any modifications to the current income or transfer tax laws.

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