2024 Individual Income Tax Rates and Brackets 2024 Form W-4 Withholding Certificate Taxpayers usually do not think to revise their Form W-4 withholdings until April or until they have paid their final 2024 taxes. Delaying a Form W-4 update may result in taxpayers withholding taxes on their wages based on an old calculation for several months of 2025. Don’t wait. AFSA recommends readers revise their Form W-4 via their human resources office or through their employer’s online portal (e.g., Employee Express for State Department employees) as soon as possible. Promptly doing so will help you avoid overwithholding or playing catch-up due to under-withholding for several months. For help in calculating withholding, the IRS built a withholding estimator, found at http://www.irs.gov/W4App. Please note that this estimator may not work well for taxpayers with rental properties, those claiming the FEIE, or those who potentially have other complicated tax issues in their returns. Taxpayers with these complications should complete the worksheets provided with Form W-4 and/or consult a tax professional. Please take particular note that the withholding necessary for a married couple filing jointly with two incomes should account for both spouses’ incomes. The Form W-4 includes optional methods to account for two or more incomes on the withholding under Step 2. Form W-4 no longer allows exemptions for dependents but does account for the child and other dependent tax credits available under current law. Standard Deduction The standard deduction has increased this year to: • $29,200 for married filing jointly (MFJ) or qualifying surviving spouses, • $21,900 for heads of household (HOH), specifically defined by Internal Revenue Code (IRC) Section 2(b), and • $14,600 for single taxpayers or married individuals filing separately (MFS). The personal exemption remains $0 for 2024. Capital Gains for Sale of Capital Assets Such as Stocks and Similar Securities Determining the correct tax rate for capital gains requires taxpayers to first categorize their capital gains into shortterm (gain from investments held for less than one year) and long-term (gain from investments held for one year or more). Next, taxpayers net their short-term capital gains (STCG) against their short-term capital losses (STCL), and their long-term capital gains (LTCG) against their long-term capital losses (LTCL). Figure 2 illustrates how the results are taxed. AFSA NEWS 60 JANUARY-FEBRUARY 2025 | THE FOREIGN SERVICE JOURNAL Figure 1
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