"IRS Reveals 2024 Tax Brackets and Contribution Limits"

The IRS is adjusting the income limits for its seven tax brackets by 5.4% to account for inflation, potentially providing tax breaks for some taxpayers in 2024. The adjustments aim to prevent "bracket creep" and ensure that workers are not pushed into higher tax brackets due to cost-of-living adjustments or raises. Taxpayers will file their 2024 taxes in early 2025. The IRS increased tax brackets for each type of tax filer, and the U.S. tax system is progressive, with higher tax rates applied to higher income levels. However, each tax rate is only applied to the income that falls within each bracket, resulting in an effective tax rate that may be lower than the marginal rate.