By Brandon DeRosa, Staff Accountant at Schwartz & Schwartz
- 401(k) contributions: Individuals can contribute up to $23,000 to 401(k) plans in 2024 (up from $22,500 in 2023). If you are 50 or older, you can contribute up to $30,500.
- IRA contributions: The annual contribution limit for IRAs in 2024 is $7,000 (up from $6,500 in 2023). If you are 50 or older, you can contribute up to $8,000. If you have a SIMPLE IRA, you can contribute up to $16,000 in 2024 (up from $15,500 in 2023).
- SEP IRA: Contributions an employer can make to an employee’s SEP-IRA cannot exceed the lesser of 25% of the employee’s compensation, or $69,000 for 2024 ($66,000 for 2023)
- Simple IRA: Contribution limit for employees through salary deferrals increases to $16,000 annually (Employees aged 50 and over can contribute an additional $3,500, for a total of $19,500)
- HSA: Contribution limits for 2024 are $4,150 for self-only coverage and $8,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
Other 2024 tax changes
- Social Security tax limit: For 2024, the maximum earnings subject to the Social Security payroll tax increased to $168,600 (up from $160,200 in 2023). This means the maximum Social Security tax you can have withheld from your paycheck in 2024 will be $10,453.20.
- Bonus depreciation: In 2024, businesses can deduct 60% in first-year bonus depreciation (down from 80% in 2023).
- Gift tax exclusions: The annual gift tax exclusion increased to $18,000 for 2024 (up from $17,000 in 2023). You can gift someone up to this amount during the tax year without filing a gift tax return. The lifetime exclusion also increased to $13.61 million (up from $12.92 million).
- Foreign earned income exclusion: For 2024, the foreign earned income exclusion (FEIE) available to expats is $126,500 (up from $120,000 in 2023). If you qualify, you can exclude foreign earnings from your income up to this amount.
Capital gains tax rates
Profits from selling assets, including stocks, real estate, crypto, etc., are subject to capital gains tax rates. Short-term gains (assets held for one year or less) are taxed as ordinary income. Long-term gains rates (for assets held over a year) max out at 20%. The 2024 long-term gain tax rates and brackets are:
| Tax rate | Single | Married filing jointly | Married filing separately | Head of household |
| 0% | $0 to $47,025 | $0 to $94,050 | $0 to $47,025 | $0 to $63,000 |
| 15% | $47,026 to $518,900 | $94,051 to $583,750 | $47,026 to $291,850 | $63,001 to $551,350 |
| 20% | $518,901 or more | $583,751 or more | $291,851 or more | $551,351 or more |
1099-K reporting changes for 2024
For those receiving payments through third-party networks like PayPal®, Venmo®, or eBay®, the 1099-K reporting requirements have been a hot topic. Here’s what’s changing for tax year 2024:
| Form 1099-K rules | 2024 | 2023 |
| Reporting threshold | $5,000 in gross payments | $20,000 in gross payments |
| Transaction threshold | One or more | At least 200 |