(NewsNation) — The start of 2024 marks the beginning of a new tax year, which means higher federal income tax brackets and increased standard deductions that could lead to more take-home pay for many Americans.

Taxpayers will also be able to contribute more to tax-deferred retirement plans in 2024 compared to the year prior.

Those updates are due to annual adjustments made by the IRS that are intended to offset inflation and prevent “bracket creep,” which is when inflation pushes people into higher tax brackets even though their purchasing power hasn’t changed.

The current year’s changes will apply to tax returns filed in 2025. Here’s what to know.

Marginal tax brackets

The 2024 earnings threshold for each tax tier is about 5.4% higher for inflation. That means those whose salaries haven’t kept up with inflation could take home more pay.

Your taxable income is whatever is left after subtracting either the standardized deduction or itemized deductions.

Standard deduction in 2024

Most opt for the standard deduction on their tax return, which is the flat dollar amount determined by the IRS that taxpayers can use to lower their taxable income and therefore what they owe.

In 2024, the standard deduction for married couples filing jointly is $29,200, up $1,500 from 2023.

For singles and married individuals filing separately, the standard deduction is $14,600, up $750 from the year before. The standard deduction is $21,900 for heads of households in 2024, $1,100 more than in 2023.

Those 65 or older at the end of the 2024 tax year can claim an additional standard deduction of $1,950 for single filers or $1,550 for joint filers.

Taxpayers who don’t take the standard deduction can choose to itemize their deductions instead.

Changes to retirement contribution limits: 401(k) and IRAs

You’ll be able to put more money toward tax-advantaged retirement accounts in 2024.

Those with 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan, can contribute up to $23,000. That’s $500 more than in 2023.

Individual retirement account (IRA) holders will also be able to contribute more — $7,000 in 2024, up from $6,500.

The IRS has also raised phase-out income ranges for IRAs.

For single taxpayers covered by a workplace retirement plan, the phase-out range for a traditional IRA is between $77,000 and $87,000 in 2024, up from $73,000 and $83,000. That means more people qualify for a deduction based on their contributions.

The income limit for Roth IRAs is also higher in 2024.

Now, the maximum you can earn and still contribute to a Roth IRA is $161,000 for single tax filers and heads of household. That’s up from $153,000 last year.

See the full breakdown from the IRS here.

Higher FSA, HSA limits

There are also higher limits for tax-advantaged accounts that people use to cover health care expenses.

In 2024, those with Flexible Spending Accounts (FSAs) can contribute up to $3,200 pre-tax dollars to pay for health care costs. By contributing to the account pre-tax you reduce your taxable income and ultimately what you owe the government.

The IRS raised the contribution limit for Health Savings Accounts (HSAs) to $4,150 for single filers and $8,300 for families. Those limits are over 7% higher than the year prior.