As it does every year, the Internal Revenue Service (IRS) has made adjustments to numerous tax provisions in consideration of inflation’s impact. These are some of the more notable adjustments for tax year 2024 – for tax returns to be filed in 2025:

• The annual contribution limit for 401(k) plans increases to $23,000 in 2024, or $30,500 for those age 50 and over. The combined employee and employer contribution limit for 401(k) plans, profit-sharing plans, and SEP-IRAs increases to $69,000 in 2024. This includes elective deferrals, employer matching contributions, and employer non-elective contributions.

• The annual contribution limit for traditional and Roth IRAs increases to $7,000 in 2024, or $8,000 for those age 50 and over.

• The income phaseout range for eligibility to contribute to a Roth IRA increases to between $146,000 and $161,000 for individuals in 2024, or between $230,00 and $240,000 for married couples filing jointly.

• The annual contribution limit for SIMPLE IRAs increases to $16,000 in 2024, while the limit for SEP-IRAs increases to $69,000.

• The Social Security Wage Base increases to $168,600 in 2024.

• The estate tax exemption increases to $13.61 million in 2024, or $27.22 million for married couples filing jointly.

• The annual contribution limit for Health Savings Accounts (HSAs) increases to $4,150 for individuals and $8,300 for families in 2024. An additional $1,000 catch-up contribution is allowed for those age 55 and over.

• The Alternative Minimum Tax (AMT) exemption increases to $85,700 for individuals in 2024, or $133,300 for married couples filing jointly. The AMT begins phasing out once income reaches $609,350 for individuals in 2024, or $1,218,700 for married couples filing jointly.

The tax professionals at Dembo Jones are familiar with all the IRS adjustments that may impact you. Give us a call with questions or for more details.