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The taxes are changing

The taxes are changing

November 15, 2023

IRS just announced the 2024 tax rate increases. This lowers taxes for 2024, but are a temporary relief before tax rates increase after another 2 years.



It’s been said that “the tax code is written in pencil”. Meaning that Congress can change the tax code at any point. Which they do, and have done. For example:

  • 2023 RMD penalty decreased from 50% to 25% (how nice of them)
  • 2022 RMD Ages increased from 72 to 73, eventually to 75 as part of the SECURE Act 2.0 [1]
  • 2019 RMD changes from 70 ½ to 72 as part of the SECURE Act[2]
  • 2018 Temporarily lowered tax rates as part of the Tax Cuts & Jobs Act (TCJA) [3]
  • 2017 Standard Deductions nearly doubled as part of the TCJA


It’s the second to last one last one that has a catch. The tax rate cuts are temporary.

I'll be following up on another post for the 401k, IRA, and standard deduction changes, but I want to take a minute and call out the tax bracket changes.

Our tax rates are lower today than they were pre-2018. Here is a side-by-side comparison of what tax rates were before the Tax Cut and Jobs Act, what they are today in 2023 and what they will be in 2024.[4]


Married Filing Jointly
39.60%Over $480,05037%Over $693,75037%Over $731,201
Note: The Head of Household filing status is retained, with a separate bracket schedule.


Single Filer
Current LawToday2024
39.60%Over $426,70037%Over $578,12537%Over $609,351


But these rates are not supposed to stay this low. Congress built the Tax Cuts & Jobs Act (TCJA) that rates will automatically go up, or “sunset”, after 12/31/2025.


This means those tax cuts will likely go up unless Congress does something about it.

As Yogi Berra famously said, “Predictions are hard, especially about the future”. Now I don’t know what Congress will do, but practically every economist I speak to does not see how Congress can extend most of these tax rates.


We could likely see Congress extend the 10% and 12% brackets, but every other bracket looks like it will sunset to the higher rate.


The recent 2024 announcement extended the brackets is a temporary relief that helps adjust for inflation, but proper planning is called for to help manage taxes for when rates do eventually increase.


This is a risk we can see ahead of time and can plan around. But the planning needs to be done.