Beth Pinsker: Here’s how to use the new tax-bracket information for 2024 to lower your tax bill

by | Nov 10, 2023 | Stock Market

When it comes to managing your taxes, where you fall in one of the seven progressive tax brackets is the key to understanding how much you’re going to end up paying when you file your return. The Internal Revenue Service announced new inflation-adjusted brackets for 2024 on tax rates that go from 10% to 37%. The dollar amounts of income separating the bands run from as little as $11,600 to more than $365,000, for those filing single, with similar ratios for those married filing jointly. 

You can pay no attention to this at all, and just let your tax preparer or software figure out the math for you. Or you can delve into the details and potentially reduce the amount you owe.  A progressive tax system means you don’t pay the top rate on your whole income. Instead, you pay the rates for each band in a row as you go up the income ladder. If your taxable income as a single filer is $11,600 in 2024, you’ll pay 10% on the entire amount. Anything above that, and you pay the 10% tax on that first chunk, and then add each additional band on top of it. Next year, for instance, if you have taxable income of more than $609,350, that puts you in the 37% bracket. You’ll p …

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