The Internal Revenue Service (IRS) announced inflation adjustments for many tax provisions in 2024, including higher contribution limits for various types of accounts and updated tax brackets.
Retirement account contribution limits
The IRS increased contribution limits for individual retirement accounts (IRAs), as well as 401(k), 403(b), and most 457 plans.
The maximum amount a worker can contribute to 401(k)/403(b)/457 plans is $23,000 in 2024, an increase of $500. The IRA contribution limit also increased $500 to $7,000. Catch-up contribution limits remain unchanged in 2024.
HSA & FSA contribution limits
The amount workers can contribute to medical savings accounts will also increase in 2024.
Individuals enrolled in a high deductible health plan (HDHP) with a health savings account (HSA) will be able to contribute up to $4,150 and those with family coverage will be able to save a maximum of $8,300.
For workers who don’t have an HDHP with an HSA and instead use a flexible spending account (FSA), the maximum contribution for 2024 is $3,200. For plans that allow unused balances to roll over, the maximum amount that can be rolled over will increase to $640.
2024 tax rates
Below are updated marginal tax rates for single taxpayers and married couples filing jointly. See the IRS website for more tax tables and additional details. Since these changes will take effect for tax year 2024, they will generally apply to tax returns filed in 2025.
- 10% for incomes of $11,600 or less ($23,200 for married couples filing jointly)
- 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
- 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
- 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
- 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
- 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
- 37% for incomes over $609,350 ($731,200 for married couples filing jointly)
In addition to updated tax rates, the IRS announced increases to the standard deduction for tax year 2024:
- Single taxpayers and married couples filing separately: $14,600 ($750 increase)
- Heads of household: $21,900 ($1,100 increase)
- Married couples filing jointly: $29,200 ($1,500 increase)
Visit the IRS website for more adjustments and tax changes for 2024.
PERA benefits and taxes
Colorado PERA benefits are subject to federal income tax, as well as applicable state and local taxes. PERA retirees who would like to update their tax withholding can do so by logging in to their secure member account or completing a paper Form W-4P. Learn more information at copera.org/taxes-on-benefits.
