2024 Tax Reference Introduction

Deborah Baker, CFP, VP & Senior Financial Planner, Diamond Capital Management

As the new year approaches, it is time to consider your new year resolutions as well as year-end tax preparation. It is not too late to make last minute contributions to your favorite charity or to your retirement plan.

The Internal Revenue Service adjusts numerous tax provisions to keep pace with inflation and you should be aware of the changes. Several key provisions affected for individuals mindful of financial planning include income tax brackets, standard deductions, the annual and lifetime gift exclusion amounts, and the social security taxable wage base. In addition to tax-related issues, contribution limits to tax-advantaged accounts are also assessed.

Attached is a “2024 Contribution limits and tax reference” detailing some key numbers for the upcoming year. Note that the following important components of financial planning - taxation, retirement saving, and estate planning - all have increased levels for 2024:

  • IRA and Employer-Sponsored Plan contributions
  • Standard deductions for taxpayers
  • Annual gift exclusion amount
  • Lifetime exemption
  • Social security taxable wage base
  • Qualified Charitable Distribution amount for IRAs (the amount increases to $105,000.00 in 2024 - the first change since this opportunity was enacted in 2006)

Investment accounts and financial plans should be reviewed and updated annually - particularly when tax-related or investment and/or savings parameters change. Professionals at Diamond Capital Management and The National Bank of Indianapolis are available to assist with portfolio management and financial planning guidance and oversight during these times.