The year 2023 is about to end and that means all the changes the United States Government and the IRS make related to a new year are about to arrive. These changes are not just about making citizens pay more. There are also changes that benefit Americans.
Among those changes are the COLA or the increase in Tax Brackets. While it is true that the COLA causes Social Security payments to increase, the change in the Tax Brackets will cause some Americans to have to pay more taxes in the coming year.
It is true, however, that most citizens who collect a Social Security check will not have to pay taxes, as usual. But the truth is that the rest of the citizens do have to pay attention to the IRS and the increase it imposes for the following taxes.
Anyway, remember that these changes in the Tax Brackets are for 2024 and, therefore, for the Tax Return that we will send in 2025. Although there is still a long way to go, when preparing documentation and invoices we must take this increase into account.
WHAT WILL BE THE INCREASE OF THE 2024 TAX BRACKETS IN THE IRS?
The increase will be different depending on whether the Tax Return is a joint or a couple. As there are two different categories each one has its own percentages and they change a little with respect to the year 2023.
Thus, the IRS will impose the following Tax Brackets as of January 2024 for citizens filing the individual return:
- 37% for annual returns over $609,350.
- 35% for annual returns over $243,725.
- 32% for annual returns in excess of $191,950.
- 24% for annual returns in excess of $100,525.
- 22% for annual returns in excess of $47,150.
- 12% for annual returns over $11,600.
- 10% for annual returns of $11,600 or less.
On the other hand, returns filed as a couple will have different percentages. These will be those percentages for married couples that send the Tax Return to the IRS:
- 37% for annual returns over $731,200.
- 35% for annual returns over $487,450.
- 32% for annual returns over $383,900.
- 24% for annual returns in excess of $201,050.
- 22% for annual returns in excess of $94,300
- 12% for annual returns greater than $23,200
- 10% for annual returns of $23,200 or less.
As can be seen, the change is in the figure and not in the percentage. With respect to the percentage of the year 2023 we find that in the next year 2024 there will be an increase of 5.4%, so we will have to pay more taxes in most cases.
How will these changes affect my Social Security check?
If you only collect one Social Security payment, you will not have any problems when it comes time to file your taxes. In most cases, the IRS does not tax money from Social Security checks because they are not large enough to be taxed.
However, any income other than Social Security does have to be reported. So if we have any extra income we should announce it so that the IRS will add it on the Tax Return.
However, as we have already said, citizens who only collect a Social Security check as their only source of income do not have to worry about paying taxes on their Tax Return, since most of these checks are not taxable.