Trucking & Taxes – March/April 2024
Every year, the Internal Revenue Service adjusts more than 60 tax provisions for inflation to prevent what is called “bracket creep.” It’s good to know where you stand before filing your trucking taxes.
Bracket creep occurs when inflation, rather than real increases in income, pushes people into higher income tax brackets or reduces the value they receive from credits and deductions.
Before 2018, the IRS used the Consumer Price Index as a measure of inflation. However, due to the Tax Cuts and Jobs Act of 2017, the IRS now uses the Chained Consumer Price Index to adjust income thresholds, deduction amounts and credit values accordingly.
The new inflation adjustments are for tax year 2024, for which taxpayers will file tax returns in early 2025.
2024 federal income tax brackets and rates
The 2024 income limits for all tax brackets and all filers, adjusted for inflation, are in the table below. The federal income tax has seven rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Standard deduction
| Tax Rate | Single Filers | Married Filing Joint | Heads of Households |
| 10% | $11,600 or less | $23,200 or less | $16,550 or less |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 | $16,551 to $63,100 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 | $63,101 to $100,500 |
| 24% | $100.526 to $191,950 | $201,051 to $383,900 | $100,501 to $191,950 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 | $191,951 to $243,700 |
| 35% | $243,726 to $609,350 | $487,451 to $731,200 | $243,701 to $609,350 |
| 37% | $609,351 or more | $731,201 or more | $609,351 or more |
Source: Internal Revenue Service, Revenue Procedure 2023-34.
The standard deduction will increase by $750 for single filers and by $1,500 for joint filers. Seniors over age 65 may claim an additional standard deduction of $1,950 for single filers and $1,550 for joint filers.
Filing Status: Deduction Amt.
- Single: $14,600
- Married Filing Jointly: $29,200
- Head of Household: $21,900
- Add’l. Amt. for Married Seniors: $1,550
- Add’l. Amt. for Unmarried Seniors: $1,950
Child tax credit
The maximum child tax credit is $2,000 per qualifying child and is not adjusted for inflation. The refundable portion of the child tax credit is adjusted for inflation and will increase from $1,600 to $1,700 for 2024.
Capital gains tax rates
Long-term capital gains face different brackets and rates than ordinary income.
Annual gift exclusion
In 2024, the first $18,000 of gifts to any person are excluded from tax, up from $17,000. The exclusion is increased to $185,000 from $175,000 for gifts to spouses who are not citizens of the United States. This does not make gifts deductible from your business income, but gifts are not taxed at or below the exclusion amounts.
Estimated taxes reminder
Estimated tax payments are the taxes you pay to the IRS throughout the year to account for income you’ve earned that wasn’t subject to tax withholding.
- Individuals, including sole proprietors, partners and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
- Review your 2023 tax return to determine, based on the prior year’s taxes, the minimum amount of estimated taxes due. Also, consult with your tax preparer to determine the estimated tax amounts due for 2024.
- When paying estimated taxes, you usually make four equal payments and follow the IRS’ yearly schedule.
- Estimated tax payments are commonly referred to as “quarterly” payments, even though they might not be three months apart or cover three months of income.
Due dates for 2024 estimated taxes:
- First payment due April 15
- Second payment due June 17
- Third payment due Sept. 16
- Fourth payment due Jan. 15, 2025
To pay estimated taxes, use Form 1040-ES. You can pay by check, cash, money order, credit card or debit card. There are also online payment options like the Electronic Federal Tax Payment System.
TruckerTaxTools.com is built exclusively for truckers handling all their bookkeeping and taxes. We are dedicated to you, the owner-operator, helping you understand your taxes and how to reduce the taxes you pay to maximize your profit. LL
This article has been presented by TruckerTaxTools.com, a division of Taxation Solutions Inc. – Tax Relief. Barry G. Fowler, EA, president of Taxation Solutions, has been providing IRS tax debt resolution and bookkeeping services to the trucking industry for more than 21 years. To schedule a free consultation, call 877-966-2477 or use the form at TruckerTaxTools.com. This article does not give and is not intended to give specific accounting and/or tax advice, as everyone’s tax situation is different. Please consult with an expert at TruckerTaxTools.com, the leader in trucker taxes.