December 2023
United States | Tax | Key 2023 and 2024 federal tax rates and limits
In brief
The following is a high-level summary of some key US federal individual tax rates and limits for 2023 and 2024 as currently in effect. This compilation is intended to serve as a reference guide for companies with globally mobile workforces as they prepare for individual tax filings relating to 2023, as well as planning for 2024.
In detail
Specific tax levies and income tax withholding
| Social security and Medicare taxes (FICA and SE tax) | 2023 | 2024 |
| Social security (SS) wage base | $160,200 | $168,600 |
| SS maximum – 6.2% | $9,932 | $10,453 |
| Medicare – 1.45%* | No ceiling | No ceiling |
| *See below for ‘Additional Medicare tax’ that applies to wages and other compensation in excess of an applicable threshold amount. | ||
| Additional Medicare Tax | 2023 | 2024 |
| A 0.9% tax is imposed on individual wages and other compensation in excess of the following threshold amounts: | Single $200,000 MFJ $250,000 MFS $125,000 HOH $200,000 | Single $200,000 MFJ $250,000 MFS $125,000 HOH $200,000 |
| *‘MFJ’ means married filing jointly, ‘MFS’ means married filing separately, and ‘HOH’ means head of household. | ||
| Tax on net investment income | 2023 | 2024 |
| A 3.8% tax* is imposed on the lesser of net investment income or the excess of modified adjusted gross income over the following threshold amounts: | Single $200,000 MFJ $250,000 MFS $125,000 HOH $200,000 | Single $200,000 MFJ $250,000 MFS $125,000 HOH $200,000 |
| Supplemental withholding flat rates | 2023 | 2024 |
| Supplemental wages up to $1,000,000 (optional)* | 22% | 22% |
| Supplemental wages greater than $1,000,000 | 37% | 37% |
| *In lieu of regular tax withholding rates and available only if certain requirements are met. | ||
Calculating individual taxable income
| Personal exemptions (PE) | 2023 | 2024 |
| Personal exemption | 0 | 0 |
| *The personal exemption is temporarily eliminated for tax years 2018-2025. | ||
| Standard deduction | 2023 | 2024 |
| Standard deduction | Single $13,850 MFJ $27,700 MFS $13,850 HOH $20,800 | Single $14,600 MFJ $29,200 MFS $14,600 HOH $21,900 |
| *The Tax Cuts and Jobs Act (TCJA) enacted in 2017, temporarily eliminated the PE and put in place larger standard deductions and child tax credits for tax years 2018-2025. | ||
| Itemized deductions | 2023 | 2024 |
| Deduction for state and local taxes not accrued in a trade or business, or on property held for the production of income (this includes income, sales, real estate, and property taxes – foreign real property taxes are not deductible) | May not exceed $10,000
MFS $5,000* | May not exceed $10,000
MFS $5,000* |
| AGI threshold that unreimbursed medical and dental expens e deductions must reach before a deduction is permitted for all taxpayers | 7.5% | 7.5% |
| Deduction for mortgage interest only for qualified indebtedness up to certain amounts
(Note that deductibility of interest on home equity debt is suspended for 2018-2025 unless the home equity loan proceeds are used for acquiring, constructing, or substantially improving any qualified residence and are secured by such residence. A qualified residence is defined as the principal residence and one other property used as a residence.) | $1M (limited to $750,000 for ‘new debt’) | $1M (limited to $750,000 for ‘new debt’) |
| *This limitation is scheduled to expire in 2025.
Note: The 2017 TCJA made various other changes to itemized deductions. For example, the overall reduction in itemized deductions by 3% of AGI in excess of certain amounts was repealed for tax years 2018-2025. Other changes were made to items including, for example, state and local taxes, employee business expenses, tax preparation fees, other 2% miscellaneous items, alimony, and moving expenses. | ||
| Charitable contribution deductions | 2023 | 2024 |
| Limit on charitable contributions to a certain percentage of the taxpayer’s AGI for those that itemize | 60% | 60% |
| Section 911 | 2023 | 2024 |
| Annual exclusion
Base housing amount Standard qualified housing expense limit* | $120,000
$19,200 $36,000 | $126,500
$20,240 $37,950 |
| *Adjustments to the limitation are provided for certain countries with high housing costs. See Rev. Proc. 2022-38 for the 2023 foreign earned income exclusion amount. See Rev. Proc. 2023-34 for the 2024 amount. | ||
| Expatriation | 2023 | 2024 |
| Five-year average annual net income tax in excess of the following amount:
Amount of net gain from mark-to-market tax regime includible in gross income of covered expatriate is reduced (but not below zero) by: | $190,000
$821,000 | $201,000
$866,000 |
| Alternative minimum tax | 2023 | 2024 |
| Alternative minimum tax (AMT) exemption amounts (subject to phase-out described in the table below): | Single $81,300 MFJ $126,500 MFS $63,250 HOH $81,300 | Single $85,700 MFJ $133,300 MFS $66,650 HOH $85,700 |
| Alternative minimum tax phase-out | 2023 | 2024 |
| The phase-out of the AMT exemption amount begins when the alternative minimum taxable income exceeds the following amounts: | Single $578,150 MFJ $1,156,300 MFS $578,150 HOH $578,150 | Single $609,350 MFJ $1,218,700 MFS $609,350 HOH $609,350 |
| Capital gains tax rate | 2023 | 2024 |
| Long term Lower-income taxpayers Short term | 15%/20% 0% Ordinary rates | 15%/20% 0% Ordinary rates |
| For 2023, the 20% long-term capital gains tax rate applies when the lesser of adjusted net capital gain or taxable income is at least $553,850 (MFJ), $492,300 (single), $276,900 (MFS), and $523,050 (HOH).
For 2024, these amounts are $583,750 (MFJ), $518,900 (single), $291,850 (MFS), and $551,350 (HOH). | ||
| Qualified dividends tax rate | 2023 | 2024 |
| Qualified dividend rate Lower-income taxpayers Nonqualified dividends | 15%/20% 0% Ordinary rates | 15%/20% 0% Ordinary rates |
| Qualified dividend income generally is taxed at the same rates and thresholds that apply to net long-term capital gains (see above). | ||
| Child tax credit | 2023 | 2024 |
| Child tax credit (per child)* | $2,000; $1,600 refundable
$500 nonrefundable credit for dependents other than qualifying children and for qualifying children without social security numbers | $2,000; $1,700 refundable
$500 nonrefundable credit for dependents other than qualifying children and for qualifying children without social security numbers |
| *The qualifying child (who has not attained the age of 17 at the end of the tax year in question) must have a social security number by the due date of the taxpayer’s return in order to claim the credit, except for the $500 nonrefundable credit, for which the dependent must have an individual taxpayer identification number (ITIN). The credit is subject to phase-outs for individuals with income over certain threshold amounts. Phase-out limitations apply when taxpayers have modified adjusted gross income in excess of $400,000 for married filing jointly, and $200,000 for all others. | ||
| Gift tax limits | 2023 | 2024 |
| Annual exclusion from total amount of taxable gifts*
Annual exclusion for gifts to non-US citizen spouses* | $17,000
$175,000 | $18,000
$185,000 |
| *This amount is per donor and per donee and refers to gifts that are not future interests in property. | ||
| Defined contribution plan limit (such as 401(k) plans) | 2023 | 2024 |
| Maximum employee elective deferral | $22,500 | $23,000 |
| Over | Not over | Tax | % on excess |
| 0 | 22,000 | 0 | 10% |
| 22,000 | 89,450 | 2,200 | 12% |
| 89,450 | 190,750 | 10,294 | 22% |
| 190,750 | 364,200 | 32,580 | 24% |
| 364,200 | 462,500 | 74,208 | 32% |
| 462,500 | 693,750 | 105,664 | 35% |
| 693,750 | 186,601.50 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 23,200 | 0 | 10% |
| 23,200 | 94,300 | 2,320 | 12% |
| 94,300 | 201,050 | 10,852 | 22% |
| 201,050 | 383,900 | 34,337 | 24% |
| 383,900 | 487,450 | 78,221 | 32% |
| 487,450 | 731,200 | 111,357 | 35% |
| 731,200 | 196,669.50 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 11,000 | 0 | 10% |
| 11,000 | 44,725 | 1,100 | 12% |
| 44,725 | 95,375 | 5,147 | 22% |
| 95,375 | 182,100 | 16,290 | 24% |
| 182,100 | 231,250 | 37,104 | 32% |
| 231,250 | 578,125 | 52,832 | 35% |
| 578,125 | 174,238.25 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 11,600 | 0 | 10 |
| 11,600 | 47,150 | 1,160 | 12 |
| 47,150 | 100,525 | 5,426 | 22 |
| 100,525 | 191,950 | 17,168.50 | 24 |
| 191,950 | 243,725 | 39,110.50 | 32 |
| 243,725 | 609,350 | 55,678.50 | 35 |
| 609,350 | 183,647.25 | 37 |
| Over | Not over | Tax | % on excess |
| 0 | 11,000 | 0 | 10% |
| 11,000 | 44,725 | 1,100 | 12% |
| 44,725 | 95,375 | 5,147 | 22% |
| 95,375 | 182,100 | 16,290 | 24% |
| 182,100 | 231,250 | 37,104 | 32% |
| 231,250 | 346,875 | 52,832 | 35% |
| 346,875 | 93,300.75 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 11,600 | 0 | 10% |
| 11,600 | 47,150 | 1,160 | 12% |
| 47,150 | 100,525 | 5,426 | 22% |
| 100,525 | 191,950 | 17,168.50 | 24% |
| 191,950 | 243,725 | 39,110.50 | 32% |
| 243,725 | 365,600 | 55,678.50 | 35% |
| 365,600 | 98,334.75 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 15,700 | 0 | 10% |
| 15,700 | 59,850 | 1,570 | 12% |
| 59,850 | 95,350 | 6,868 | 22% |
| 95,350 | 182,100 | 14,678 | 24% |
| 182,100 | 231,250 | 35,498 | 32% |
| 231,250 | 578,100 | 51,226 | 35% |
| 578,100 | 172,623.50 | 37% |
| Over | Not over | Tax | % on excess |
| 0 | 16,550 | 0 | 10% |
| 16,550 | 63,100 | 1,655 | 12% |
| 63,100 | 100,500 | 7,241 | 22% |
| 100,500 | 191,950 | 15,469 | 24% |
| 191,950 | 243,700 | 37,417 | 32% |
| 243,700 | 609,350 | 53,977 | 35% |
| 609,350 | 181,954.50 | 37% |
Note: 2023 rate tables are provided in Rev. Proc. 2022-38; 2024 rate tables are provided in Rev. Proc. 2023-34
How we can help
Companies with globally and domestically mobile populations face unique risks and challenges within our regulatory environment. We are available to assist with any questions about your US citizen employees working abroad, non-US employees working in the United States, as well as your domestically mobile population.
Contact us
For a deeper discussion of how this information might affect your business, please contact your regular Global Mobility Services engagement team or one of the following team members:
David Austin
Co-CEO Americas
david.austin@vialto.com
Mike Branca
Co-CEO Americas
michael.branca@vialto.com
Julie Baron
Partner
julie.m.baron@vialto.com
Rob Cinberg
Partner
robert.h.cinberg@vialto.com
Susie McCauley
Director
susan.j.mccauley@vialto.com
Further information on Vialto Partners can be found here: www.vialtopartners.com