Projected Inflation Adjusted Amounts for 2024

Take-Away: With the release of the ‘chained’ Consumer Price Index for August 2023 behind us, we now have a pretty good idea of what the federal tax exemptions and exclusions will be for 2024.

Applicable Exemption Amount: $13,610,000 (up from $12,920 this year.) That is almost $700,000 more per individual. For those individuals who have already used all their full exemption, this is a new opportunity.

Annual Exclusion Amount: $18,000 (up from $17,000 this year.)

Gift Tax Exclusion for Non-Citizen Spouse: $185,000 (up from $175,000 this year.)

Special Use Valuation Reduction [IRC 2032A]: $1,380,000 (up from $1,310,000 this year.)

Top Income Tax Bracket (37%) for Trusts and Estates: $15,200 (up from $14,450 this year.) The maximum rate on capital gains for trusts and estates will begin at $15,450 (up from $14,650 this year.)

Alternative Minimum Tax Exemption for Trusts and Estates: $29,900 (up from $28,400.) The phase-out of this exemption will start at $99,650 (up from $94,600 this year.)

There is also a consensus that that Social Security benefits will increase by 3.2% starting in 2024.

Conclusion: The final adjustments will be published in a Revenue Procedure that will probably be published in the next 4 to 6 weeks by the IRS.