Key 2024 Inflation-Adjusted Tax Parameters for Small Businesses and their Owners

The IRS recently announced various inflation-adjusted federal income tax amounts. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and brackets If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income from operations is passed through to you and reported on your personal Form 1040. You then pay the individual federal income tax rates on that income. Here are the 2024 inflation adjusted bracket thresholds. 10% tax bracket: $0 to $11,600 for singles, $0 to $23,200 for married joint filers, $0 to $16,550 for heads of household; Beginning of 12% bracket: $11,601 for singles, $23,201 for married joint filers, $16,551 for heads of household; Beginning of...

Key 2024 Inflation-Adjusted Tax Amounts for Individuals

The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government. Standard deduction  Here are the inflation-adjusted standard deduction numbers for 2024 for those who don’t itemize: $14,600 if you’re single or use married filing separate status (up from $13,850 in 2023). $29,200 if you’re married and file jointly (up from $27,700). $21,900 if you’re a head of household (up from $20,800). Older taxpayers and those who are blind are entitled to additional standard deduction allowances. In 2024 for those age 65 or older or blind, the amounts will be: $1,550...