Here’s what we have on deck today:

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📗 Read: The NEW 2024 Tax Brackets

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🎙️ Listen: How to Bucket Your Money

The 2024 Tax Brackets Have Changed

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Good news, inflation has adjusted the tax brackets for 2024. Here is an updated chart.

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2024 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households

The standard deduction for the 2024 tax year has also increased: ​
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For Married Couples Filing Jointly: The standard deduction is $29,200, which is an increase from $27,700 in 2023​​​​.
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For Single Taxpayers and Married Individuals Filing Separately: The standard deduction is $14,600, reflecting an increase of $750 from 2023​​.
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For Heads of Households: The standard deduction will be $21,900, which is an increase of $1,100 from the previous year​​.

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These adjustments are part of the IRS's inflation adjustments for the 2024 tax year.
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Now all of this is great stuff, but if you don’t understand how tax brackets work this may sound like gibberish. But never fear I am going to explain them in simple terms below.
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How Tax Brackets Work in The U.S.

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Marginal tax brackets are a fundamental aspect of many progressive tax systems, including that of the United States. Here's how they work:

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👍 Progressive Tax System: In a progressive tax system, different portions of an individual's income are taxed at different rates. The more someone earns, the higher the rate they pay on their income above certain thresholds.

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💰Tax Brackets: Tax brackets are ranges of income taxed at specific rates. For instance, in the U.S., for the tax year 2024, there are seven federal tax brackets, each with its own rate: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

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💡Marginal Tax Rate: Your marginal tax rate is the rate you pay on the last dollar you earn. It's not the rate you pay on all of your income. This is a common misconception. Instead, different portions of your income are taxed at the corresponding rates for those income brackets.

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⚡How It Works: Here's a simplified example. Suppose there are only three tax brackets:
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1. 10% on income up to $10,000
2. 12% on income between $10,001 and $20,000
3. 22% on income over $20,000

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If you earn $25,000, here's how your income is taxed:

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The first $10,000 is taxed at 10%, so you pay $1,000.

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The next $10,000 (from $10,001 to $20,000) is taxed at 12%, adding $1,200.

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The final $5,000 (from $20,001 to $25,000) is taxed at 22%, adding $1,100.

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So, your total tax would be $3,300. Even though your highest tax rate (your marginal rate) is 22%, you don't pay 22% on all your income, only on the portion above $20,000.
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✍️ Effective Tax Rate: This is the average rate at which your income is taxed. In the above example, your effective tax rate would be less than your highest marginal tax rate (22%). It's calculated as your total tax divided by your total income.
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❓Why Marginal Rates? Marginal tax rates are used to ensure that the tax system is fair and progressive. Those who earn more pay a higher rate only on the income that falls within higher brackets, not on their entire income. This system is designed to avoid disproportionately burdening lower-income individuals.

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👍 Money Finds

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Sudden Bank Account Closures 🏦❓

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In a detailed New York Times report, a concerning trend is explored where customers are finding their bank accounts closed unexpectedly. The article delves into various cases, examining the potential reasons behind these abrupt closures, such as regulatory compliance and fraud prevention measures. It also discusses the impact on affected customers, who are often left without access to funds and with little to no explanation from their financial institutions.

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Housing Market Shift for Young Buyers 🏠📉

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​The Globe and Mail discuss potential changes in the housing market that could benefit young people who have been priced out. As the market experiences shifts and potential softening in prices, there might be new opportunities for those previously unable to afford homes. This article delves into the economic factors that could lead to these changes and what it means for young prospective homeowners.

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Sam Bankman-Fried's Trial and FTX Fraud 📉👨‍⚖️

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​Vox's coverage of Sam Bankman-Fried and the FTX trial details the charges of fraud against the cryptocurrency exchange founder. It provides an in-depth look into the allegations, the implications for the crypto market, and what the trial could mean for the broader financial technology sector. The article gives insights into how Bankman-Fried's actions and the subsequent legal proceedings have impacted stakeholders and the cryptocurrency world.

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​From Passive To Passionate by Brian Luebben​

​Why You Need to Bucket Your Money with Jesse Cramer​

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​How Long it Takes to Go From $100K to $1 Million​

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