The IRS announced significant tax changes for 2023. So what does that mean to most? The greatest interest is the increase in the standard deuction for single and married couples! That's right, with after a year of the highest inflation growth in four decades, the IRS made the standard deduction for single to $13,850 up $900 from the prior year and married couples filing jointly to $27,700 up $1,800 from the prior year. The heads of households will be $20,800 up $1,400 from the prior year.
You're probably wondering what is a standard deduction and how is it related to inflation adjustments? The standard deduction is a specific deduction that the IRS allows and adjusts for inflation every year. The standard deduction is based on filing status. Following tax reform, the IRS reports that close to 90% of taxpayers take the standard deductions instead of itemizing their deductions. After the release of the inflation adjustment, it is expected even more people may move into claiming the standard deduction instead of itemizing since their deductions may be more. For taxpayers who are blind or at least age 65, can claim an additional standard deduction. For the taxyear 2023, the deduction is $1,850 per single or head of household or $1,500 per qualifying individual that is married filing jointly or separately.
Want to know another great news break released? The Earned Income Tax Credit and income tax brackets for tax year 2023 have gone up significantly. The Earned Income Tax Credit is the country's largest program for working people with low to moderate income levels. For the 2023 tax year, the maximum EITC amount is $7,430 for qualifying taxpayers who have three or more qualifying children. That is a $495 increase since the tax year 2022.
For all 60 tax provisions for the inflation adjustments, check out the full listing at
When Can I File My Taxes?
Tax season typically starts at the end of January. You should see a W-2 form from your employer in the mailbox by the end of the month. Many employers use a digital payroll system for direct deposit, so you migh also find you W-2 online. Freelancers and contractors should also be on the lookout for a 1099 form from each of their clients. Some other tax forms you might need are mortgage interest statements, inventmest income statements, charitable contribution statements. Go ahead and pull out those receipts you've saved all year if you're itemizing your deductions. Once you have all these forms gathered and orgazined, you've got the green light to file your taxes.
Tax filing deadline: April 15, 2024
Extension deadline: October 15, 2024
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