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Amid soaring inflation, the Internal Revenue Service on Tuesday announced increases in the federal income tax rate and standard deduction for 2023.
The agency raised the income threshold for each tier to apply returns filed in 2024 to the 2023 tax year.
These brackets show how much federal income tax you’ll owe in each portion of your “taxable income,” calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
high standard deduction
The standard deduction will also increase in 2023, from $25,900 in 2022 to $27,700 for married couples filing jointly. Single filers may ask for $13,850, up from $12,950.
Other tax adjustments
The IRS also boosted data on dozens of other provisions, such as the alternative minimum tax, a parallel system for high earners and estate tax exemptions for wealthy families.
There are also higher income tax credits that can write off up to $7,430 for low- and moderate-income filers. Employees can wire $3,050 into a healthy flexible spending account.
While the agency has yet to release 401(k) and IRA limits for 2023, experts predict the IRA limit will jump to $6,500 for savers under 50.