Important Estate and Tax Law Changes for 2024

In
 / 
by Andrew Kulha
 / 
December 7, 2023
Important Estate and Tax Law Changes for 2024

As we welcome December, a month of transition and reflection, Mission Wealth remains vigilant in keeping track of important updates. Just as the leaves fall and the air grows crisper, the IRS has unveiled crucial adjustments to tax brackets, credits, and deductions. Here are the key highlights that can shape your financial path in the upcoming year.

The 2024 Income Tax Rates by Filing Status

Married Filing Jointly and Surviving Spouses

Taxable Income

Tax Rate

$0-$23,200.00

10%

$23,200.01 – $94,300.00

12%

$94,300.01 – $201,050.00

22%

$201,050.01 – $383,900.00

24%

$383,900.01 – $487,450.00

32%

$487,450.01 – $731,200.00

35%

$731,200.01 +

37%

Head of Household

Taxable Income

Tax Rate

$0 – $16,500.00

10%

$16,550.01 – $63,100.00

12%

$63,100.01 – $100,500.00

22%

$100,500.01 – $191,950.00

24%

$191,950.01 – $243,700.00

32%

$243,700.01 – $609,350.00

35%

$609,350.01 +

37%

Unmarried Individuals (other than Surviving Spouses and Heads of Households)

Taxable Income

Tax Rate

$0 – $11,600.00

10%

$11,600.01 – $47,150.00

12%

$47,150.01 – $100,525.00

22%

$100,525.01 – $191,950.00

24%

$191,950.01 – $243,725.00

32%

$243,700.01 – $609,350.00

35%

$609,350.01 +

37%

Married Filing Separate

Taxable Income

Tax Rate

$0 – $11,600.00

10%

$11,600.01 – $47,150.00

12%

$47,150.01 – $100,525.00

22%

$100,525.01 – $191,950.00

24%

$191,950.01 – $243,725.00

32%

$243,700.01 – $365,600.00

35%

$365,600.01 +

37%

Estates and Trusts

Taxable Income

Tax Rate

$0 – $3,100.00

10%

$3,100.01 – $11,150.00

24%

$11,150.01 – $15,200.00

35%

$15,200.01 +

37%

 

Additional Updates to Gifting and 529 Planning Amounts

  • The annual gift exclusion, which is the amount you can gift to anyone without needing to file a gift tax return, will be $18,000 in 2024 (up from $17,000 in 2023).
  • The five-year 529 super funding contribution will be $90,000 in 2024. You can gift any amount above your annual exclusion to a 529 plan, but you must file a gift tax return and pro-rate the gift for an entire five-year period to show the gift resulting in no tax due or credit exemption used.
  • The lifetime annual exclusion, which is the total aggregate amount of funds that you can give to anyone above your annual gift exclusion during your life or at death before owing estate or gift taxes, will be $13,610,000 in 2024 (up from $12,920,000 in 2023). For married couples, this amount can be combined with your spouse through “portability”, meaning a married couple could give up to $27,220,000 in 2024 before owing estate or gift taxes on any gifts in the future.

Reminder: Current Tax Laws Sunset in 2025

We don’t expect any major changes in the tax and estate laws other than the standard inflation adjustments in the next few years. However, the current tax laws are scheduled to sunset at the end of 2025, leading to potential tax increases across the board.

For many individuals, this is an opportune time to talk with your wealth advisor about the power of Roth conversions, taking advantage of lower tax brackets today to pay fewer tax dollars over your lifetime and leave a tax-free legacy to your children or other beneficiaries. For certain individuals with higher net worth or expecting to have a high net worth through a liquidity event or business growth in the future, now is the time to update your wealth transfer and estate plan to take advantage of the expanded lifetime unified credit exemption available. The amount you can pass tax-free is scheduled to be cut in half with the tax law sunset at the end of 2025. The IRS has stated that this is a “use it or lose it” opportunity. 

At Mission Wealth, we proactively work with our clients to understand the complexities of the tax laws as they are today and plan for changes in the future. Our advisors work closely with you and our internal group of strategy experts – at no additional cost – to ensure you receive advice that is always in your best interest. 

Financial Guidance For Your Life Journey

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Guidance For Your Full Financial Journey

Through our comprehensive platform and expertise, Mission Wealth can guide you through all of life's events, including retirement, investment planning, family planning, and more. You will face many financial decisions. Let us guide you through your options and create a plan.

Mission Wealth’s vision is to provide caring advice that empowers families to achieve their life dreams. Our founders were pioneers in the industry when they embraced the client-first principles of objective advice, comprehensive financial planning, coordination with other professional advisors, and proactive service. We are fiduciaries, and our holistic planning process provides clarity and confidence. For more information on Mission Wealth, please visit missionwealth.com.

To meet with a Mission Wealth financial advisor, contact us today at (805) 882-2360.

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