Some important "trigger" income levels for 2024

[Gumby]

CORRECTED TO POST #16

Similar to what I did for the last four years, here is a list of important “trigger” income levels for 2024.

Numbers are actual AGI/MAGI (i.e. - before standard or itemized deductions) unless indicated as Taxable Income by an asterisk * which means you can add $29,200 MFJ/$14,600 single if you use the standard deduction (+ another $1550 per person over 65 or blind if MFJ/ $1950 if over 65 or blind single). Note also that MAGI and AGI are often not the same in different sections of the tax code. If you are close to one of the limits, ensure you know what is and is not included in income for that particular limit. Here is a discussion where the AGI/MAGI distinction was crucial and cost someone $15k.https://www.early-retirement.org/fo...rdable-care-act-plans-115682.html#post2844864

I have put social security taxation levels in a separate post (here https://www.early-retirement.org/fo...-income-levels-2021-a-106300.html#post2506932), because it is a little complicated (not too bad) and highly dependent on exactly how much social security you receive in comparison to your total income. (This links to the 2021 thread, Post #2).

This is based on current law; there may be changes. As with the last four years, this is a collaborative effort, so if you have corrections or additions, please post them here and I will adjust this first post as necessary. I have included updated references at the bottom of the post. If you have a change or addition, it would be helpful to link a reference for it.

Link to 2023 thread is here - https://www.early-retirement.org/fo...-trigger-income-levels-for-2023-a-115879.html


Income level/effect (as of 1/1/2024) This for Married Filing Jointly. Numbers for single taxpayers are listed separately below.

$19,720 -- 100% of FPL (Household of 2, Lower 48) -- minimum income for ACA subsidy in non-Medicaid expansion states (see reference **).

$23,201* - 12% marginal tax bracket for ordinary income

$27,214 -- 138% of FPL (Household of 2, Lower 48) -- minimum income for ACA subsidy in Medicaid expansion states (see reference**).

$44,640 - Maximum two people collecting Social Security prior to FRA can earn ($22,320 each) in W-2 income before Social Security is reduced

$46,001 – Savers Credit drops from 50% to 20%

$50,001 – Savers Credit drops from 20% to 10%

$76,501 – Savers Credit eliminated

$78,880 - 400% FPL -- ACA subsidy reduced to the point where premium can be 8.5% of income (Household of two, Lower 48)(note that ACA subsidy levels are based on the prior year’s poverty levels)

$94,051* - Long term capital gains taxed at 15%

$94,301* - 22% marginal tax bracket for ordinary income.

$123,001 - Begin limiting traditional IRA deduction amounts (if you have a retirement plan at work)

$143,001 - No traditional IRA deductions allowed (if you have a retirement plan at work)

$160,001 - Begin phaseout of American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) for college costs (note that this is not indexed for inflation)

$165,001 - Student loan interest deduction (up to $2500) phaseout begins

$180,001 - AOTC/LLC are eliminated

$195,001 - Student loan interest deduction ends

$201,051* - 24% tax bracket

$206,001 - IRMAA Medicare surcharge begins (based on income two years prior. i.e. 2022 income)

$230,001 - Begin limiting Roth contribution amounts

$240,001 - No Roth contributions allowed (consider backdoor Roth)

$250,001 - NIIT 3.8% surcharge (note this is not indexed for inflation)

$250,001 - WAGE/SELF EMPLOYMENT INCOME - Additional 0.9% Medicare tax. (See post #15)

$258,001 - IRMAA level 2 surcharge

$300,000 - Termination of electric vehicle purchase tax credits

$322,001 - IRMAA level 3

$383,901* - 32% tax bracket

$386,001 - IRMAA level 4

$487,451* - 35% tax bracket

$583,751* - 20% long term capital gains rate

$731,201* - 37% tax bracket

$750,001 – IRMAA level 5



Income level/effect (as of 1/1/2024) This is for Single Filers vv. Numbers for Married Filing Jointly are listed separately above ^^.

$11,601* - 12% marginal tax bracket for ordinary income

$14,580 -- 100% of FPL (Household of 1, Lower 48) -- minimum income for ACA subsidy in non-Medicaid expansion states (see reference**).

$20,120 -- 138% of FPL (Household of 1, Lower 48) -- minimum income for ACA subsidy in Medicaid expansion states (see reference**).

$22,320 - Maximum a single person collecting Social Security prior to FRA can earn in W-2 income before Social Security is reduced

$23,001 – Savers Credit drops from 50% to 20%

$25,001– Savers Credit drops from 20% to 10%

$38,251 – Savers Credit eliminated

$47,026* - Long term capital gains taxed at 15%

$47,151* - 22% marginal tax bracket for ordinary income.

$58,320 - 400% FPL -- ACA subsidy reduced to the point where premium can be 8.5% of income (household of one, Lower 48)

$77,001 - Begin limiting traditional IRA deduction amounts. (if you have a retirement plan at work)

$80,001 - Student loan interest deduction (up to $2500) phaseout begins

$80,001 - Begin phaseout of American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) for college costs (note that this is not indexed for inflation)

$87,001 - No traditional IRA deductions allowed. (if you have a retirement plan at work)

$90,001 - AOTC/LLC are eliminated

$95,000 - Student loan interest deduction ends.

$100,526* - 24% tax bracket

$103,001 - IRMAA Medicare surcharge begins (based on income two years prior. i.e. 2022 income)

$129,001- IRMAA level 2 surcharge

$146,001 - Begin limiting Roth contribution amounts

$150,000 - Termination of electric vehicle purchase tax credits

$161,001 - IRMAA level 3 surcharge. Also, no Roth contributions allowed (consider backdoor Roth)

$191,951* - 32% tax bracket

$193,001 - IRMAA level 4

$200,001 - NIIT 3.8% surcharge (note this is not indexed for inflation)

$200,001 - WAGE/SELF EMPLOYMENT INCOME - Additional 0.9% Medicare tax (See post #15)

$243,726* - 35% tax bracket

$518,901* - 20% long term capital gains rate

$500,001 - IRMAA level 5

$609,351* - 37% tax bracket



References:
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024
https://www.irs.gov/pub/irs-drop/rp-23-34.pdf
https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000
https://www.irs.gov/pub/irs-drop/n-23-75.pdf
https://www.eitc.irs.gov/other-refu...e-education-credits/compare-education-credits
https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax
https://www.healthinsurance.org/obamacare/will-you-receive-an-aca-premium-subsidy/
**https://www.kff.org/medicaid/issue-...medicaid-expansion-decisions-interactive-map/ (Medicaid expansion map. These could change. Research it.)
https://aspe.hhs.gov/sites/default/...5ca020d58fe77696/detailed-guidelines-2023.pdf
https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

 

[tizod]

wow, great summary, thanks!!

 

[flyingaway]

The link to ***https://www.kff.org/medicaid/issue-b...teractive-map/ (Medicaid expansion map. These could change. Research it.)

does not seem to work.

 

[MichaelB]

Thanks, Gumby

 

[COcheesehead]

Thank you

 

[Gumby]

The link to ***https://www.kff.org/medicaid/issue-b...teractive-map/ (Medicaid expansion map. These could change. Research it.)

does not seem to work.

Thanks. I believe I have fixed the problem.

 

[mn54]

thank you gumby. always very helpful info.

 

[Car-Guy]

Thanks. Very useful.

 

[Winemaker]

thanks, Gumby!

 

[Dean56]

Thank you for posting this information. Very handy.

 

[Gremlin]

This is always so helpful. Thanks so much!

 

[wdwwildbill]

Super helpful Thank you !!

 

[Healthy Lifestyle]

Thank you this will surely come in handy!

 

[Badger]

Thank you Gumby.

Cheers!

 

[USGrant1962]

Thanks again!

Missing Additional Medicare Tax (the other AMT) of 0.9% that kicks in at $250K/$125K wages/SE income. https://www.irs.gov/taxtopics/tc560

It is a strange one though because it doesn't use AGI, MAGI or taxable income, but rather total wages/SE income (and Railroad Retirement Income for some reason). But considering that Medicare tax is only 1.45% on wages and 2.9% on SE income, it is actually rather large at another 0.9%.

 

[Gumby]

Thanks again!

Missing Additional Medicare Tax (the other AMT) of 0.9% that kicks in at $250K/$125K wages/SE income. https://www.irs.gov/taxtopics/tc560

It is a strange one though because it doesn't use AGI, MAGI or taxable income, but rather total wages/SE income (and Railroad Retirement Income for some reason). But considering that Medicare tax is only 1.45% on wages and 2.9% on SE income, it is actually rather large at another 0.9%.

Thanks. I see that it is $200k for single taxpayers, so that's what I have put in the list.