2024 Tax Changes for High Earners:
- Top Tax Bracket: Rates between 10% to 37% remain the same, and the income that falls into each bracket has increased. The 37% rate applies to single filers earning over $609,350 and married couples filing jointly over $731,200.
- Alternative Minimum Tax (AMT): The exemption is $85,700 for singles and $133,300 for couples, phasing out at $609,350 and $1,218,700, respectively.
- Foreign Earned Income Exclusion: Up to $126,500 can be excluded for those working abroad.
- Estate Tax Exclusion: Set at $13,610,000, aiding in estate planning for those with significant assets.
- Gift Tax Exclusion: $18,000 annually for a single individual and $36,000 for married couples, enabling strategic financial gifting.
Tax Reduction Strategies:
- Max Out Retirement Contributions: Lowers taxable income and prepares for retirement.
- Roth IRA Conversions: Offers tax-free growth and withdrawals, ideal for future tax planning
- Fund 529 Plans: Saves for education in a tax-advantaged manner.
- Set Up a Donor-Advised Fund: Maximizes charitable giving tax benefits.
- Invest in Opportunity Zones: Defers capital gains tax.
These tax changes and strategies aim to maintain fairness and offer multiple avenues for tax optimization. They are particularly beneficial for high earners and those with diverse income sources or significant assets. Working with Capital Insight Partners to consider these adjustments could substantially benefit your financial strategy.
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