5 Tax Changes Could Help Boost Your Wealth In 2024

The Federal Reserve made significant progress in bringing down inflation while maintaining growth in the U.S. economy in 2023. However, while inflation has trended lower recently, interest rates have been historically high and inflation remains well above the Fed’s 2% long-term target.

In light of the current financial environment, the IRS has made some changes for 2024. Here are five key tax changes you should know about for 2024.

Higher contribution limits for 401(k) and IRAs

There is good news if you’re interested in upping your retirement savings in 2024 – higher contribution limits!

The contribution limit for employees who participate in 401(k) and 403(b) plans has increased to $23,000, up from $22,500 in 2023.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan remains $7,500 for 2024.

That means participants in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024.

The limit on annual contributions to an IRA increased to $7,000, up from $6,500.  The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.

Are you trying to maximize your 401(k) contribution or 403(b) contributions and wondering how much to contribute each check?

The chart below breaks down contribution for investors based on payroll frequency and eligibility to make catch-up contributions (i.e., investors who turn 50 in 2024).

Inflation-adjusted tax brackets

Each year, the Internal Revenue Service (IRS) adjusts many tax provisions for inflation to prevent what is called “bracket creep.” These adjustments can help prevent taxpayers from ending up in a higher tax bracket as their cost of living rises. The tax bracket adjustments can also lower taxes for those whose compensation has not kept up with inflation.

If Roth conversions are part of your tax minimization and investment strategy, you could be able to convert thousands of more dollars into your Roth IRA in 2024 and stay in the same bracket.

The table below shows the income brackets for both single filers and married couples filing jointly for the 2024 tax year.

2024 Federal Tax Brackets


Higher threshold for long-term capital gains

You may have encountered a long-term capital gains tax if you receive a 1099 form from an investment or brokerage account. This tax is triggered on “capital assets” like stocks, bonds, cryptocurrency, and real estate held for more than a year and sold for a profit.

Capital-gains tax rates remain the same for 2024, but the income thresholds will push higher, and inflation adjustments from the IRS will tweak the rules on capital gains taxes in 2024.

Long-term capital gains tax rates for 2024


Higher contribution limits for Roth IRA contributions

Roth IRAs can be a good place to save money for retirement if you would like to have tax-free qualified withdrawals in retirement. I’ve written extensively on the benefits of Roth IRAs, as well as Roth IRA conversions.

Retirement savers will enjoy the biggest contribution limit increases that we’ve ever seen next year. The Roth IRA contribution limit for savers under 50 will jump to $7,000, up from $6,500 in 2023. If you’re aiming to contribute the maximum amount to a Roth IRA, you can stash away roughly $583 every month to hit your goal in a year.

In addition, the contribution limits for savers over age 50 by the end of 2024 can tack on up to $1,000 more in “catch-up contributions,” bringing your contribution limit up to $8,000.

Roth IRA contribution limits

Higher income limits for Roth IRA contributions

The IRS increased the income limits required to make a full or partial Roth IRA contribution.  Below are the eligible income limits for making Roth IRA contributions in 2023 and 2024:

Roth IRA Contribution Eligibility for 2023

Roth IRA Contribution Eligibility for 2024


If you are over the income limit, you could consider the potential benefits of making a back-door Roth IRA contribution. Read more about that strategy here.

No RMDs for tax-qualified employer Roth Plan accounts

Taking RMDs can be stressful for many people because they are subject to taxes on the distribution amount, even if they don’t need that income. And if jumping tax brackets isn’t bad enough, that extra income can increase your Social Security tax.

If you’re interested in reading about RMDs and strategies that could potentially lower taxes associated with your RMDs, click here.

However, the passing of Secure 2.0 included a few changes that will happen in 2024. Beginning in 2024, SECURE 2.0 eliminates RMDs for tax-qualified employer Roth plan accounts, including for those participants who already started taking lifetime RMDs (although an RMD attributable to 2023 but payable in 2024 must still be taken). RMDs for Roth accounts in employer retirement plans are required to be taken by the participant’s beneficiary upon the participant’s death.

If you’re interested in reading more about Roth conversions and whether they might make sense for you, click here.

If you’re wondering how these tax changes might affect your situation, talk to your financial adviser or schedule a consultation with us.

Getting started is easy with just three simple steps:

  • Schedule your complimentary initial consultation
  • Let us customize a plan designed to help you maximize your wealth, minimize your lifetime tax bill, and protect your time and money so that you have more time for what matters to you.
  • We’ll help you stay on track so that you can enjoy the wealth you’ve created, both now and in the future.

Disclosure: One Life Financial Group provides a comprehensive tax minimization process and uses sophisticated software to help you uncover opportunities to help minimize your tax bill. However, One Life does not process tax returns. Discuss all tax planning opportunities with your accountant before implementing tax planning strategies. 

All written content is for information purposes only. Opinions expressed herein are solely those of One Life Financial Group Inc. and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered through One Life Financial Group, Inc., an Investment Advisor in the State of Minnesota.