IRS Announces Inflation Adjustments — See Yours
(LibertySons.org) – Every year the IRS makes adjustments to the tax rates, and it usually does so rather quietly. But the agency’s 2023 tax year’s announcement is making headlines. The increases for deductions and credits are increasing substantially due to the record-high inflation that is putting Americans’ budgets in peril.
IRS Releases Inflation Adjustments for 2023 Taxes: Here’s What It Means for You https://t.co/kNLu6YEmmc
— Ginger Grant (@gigi1943) October 19, 2022
The IRS made sweeping changes that impact every single taxpayer using the chained Consumer Price Index, which considers buying substitutions people make that the Consumer Price Index does not take into account. The most significant alterations include an increase for the standard deduction of $900 for single filers, $1,400 for heads of households, and $1,800 for joint taxpayers.
The marginal rates also will be different for everyone except the top earners or those making more than $578,125 per year. Those individuals will keep paying 37%. Taxpayers earning $11,000 or less will be subject to the lowest rate at 10%.
The earned income tax credit increases for the 2023 tax year to a maximum of $7,430 for qualifying families. The alternative minimum tax exemption also adjusts so that it phases out at $578,150, which is up from $539,900 for 2022.
Some facets will not change due to past legislation. The Tax Cuts and Jobs Act eliminated the personal exemption, which stays at zero. The measure also stopped the limit on itemized deductions, so that rule also remains for 2023.
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