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10 New Tax Numbers for 2024, for Life and Health Pros

By Allison Bell

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The Internal Revenue Service has unveiled Revenue Procedure 2023-34, a version of a guide that updates dozens of the numbers that will be used to calculate clients’ 2024 income taxes.

The guide provides parameters for all sorts of tax provisions that need to be adjusted for inflation, including basics such as the standard deduction and the top tax rate.

Here are 10 items from the guide that could affect tax calculations involving life insurance, health insurance or long-term care insurance.

Numbers for Life Insurance and Estate Planning

1. Unified Credit Against Estate Tax

The credit will increase to $13.61 million for a decedent dying in 2024, from $12.92 million for a decedent dying in 2023.

2. Gift Tax Exclusion

The exclusion for 2024 will be $18,000 for gifts to any person, and $185,000 for gifts to a spouse who is not a citizen of the United States. That compares with 2023 limits of $17,000 for gifts to any person, and $175,000 for gifts to a non-U.S. citizen spouse.

3. Valuation of Qualified Real Property in a Decedent’s Gross Estate

If a property owner dies in 2024, and the executor of the estate chooses to use a special valuation method for real estate, that approach can reduce the value of the property by a maximum of $1.39 million. For a property owner who dies this year, the maximum impact of that approach is $1.31 million.

4. Estate and Trust Income Tax Rates

The cutoff for the maximum rate is $15,200, and the amount owed on the portion over the cutoff is 37% of the excess plus $3,659.50.

For 2023, the cutoff for the maximum rate is $14,450, and the amount owed is 37% of the excess plus $3,491.

Numbers for Health Insurance and Benefits

5. Cafeteria plans

The dollar limit for voluntary employee salary reductions for contributions to health flexible spending arrangements (FSAs) will increase to $3,200, from $3,050. The maximum amount of unused value that can be carried over to the next year will increase to $640, from $610.

6. Medical Savings Accounts

The MSA is the ancestor of the HSA and a sibling of the health reimbursement arrangement.

An MSA holder must combine high-deductible health coverage with a special savings account.

For 2024, the acceptable deductible ranges will be $2,800 to $4,150 for self-only coverage, and $5,550 to $8,350 for family coverage, For 2023, the acceptable deductible ranges are $2,650 to $3,950 for self-only coverage, and $5,300 to $7,900 for family coverage.

The maximum annual out-of-pocket expense limits will increase to $5,550 for individuals and $10,200 for families, from $5,300 for individuals and $9,650 for families.

7. Qualified Small Employer Health Reimbursement Arrangement

The maximum eligible employer reimbursement amounts for this program will increase to $6,150 for individual coverage and from $12,450 for family coverage, from $5,850 for individual coverage and $11,800 for family coverage.

Numbers for Long-Term Care Planners

8. Eligible Long-Term Care Premiums

Clients who have high enough medical bills to benefit from itemizing their medical expenses can include at least some of their private long-term care insurance premiums in their medical expense total.

The amounts that can be included in the medical expense total vary by age.

For 2024, the amounts went down, apparently because of the effect of the COVID-19 pandemic on long-term care insurance claims and premiums.

Here’s how the 2024 “includible” premium levels compare with the 2023 levels:

  • 40 or under: will decrease to $470, from $480.
  • More than 40 and up to 50: will decrease to $880, from $890.
  • More than 50 and up to 60: will decrease to $1,760, from $1,790.
  • More than 60 and up to 70: will decrease to $4,710, from $4,770.
  • 70 and older: will decrease to $5,880, from $5,960.

9. The Qualified Long-Term Care Insurance Contract or Life Insurance Contract Per Diem Limitation

The dollar limit on the benefits will decrease to $410 per day, from $420 per day.

Legislative Advocacy

10. Reporting Exception Limit

The IRS offers a reporting exception for some tax-exempt organizations with nondeductible lobbying expenditures.

The reporting exception limit will increase to $140 or less for 2024, from $132 or less for 2023.

IRS headquarters in Washington. Credit: Shutterstock

Allison Bell

Think_Allison

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