Written By: Allie Corrigan-Luke
If you aren't living under a rock then you know that we are officially in a recession. People are tightening their belts, home sales are tanking, and it's all the news can talk about because apparently is the only interesting thing happening at the moment (said sarcastically).
How will this affect your taxes next year you ask? Excellent question! The Inflation Reduction Act was recently passed and there are quite a few inflation adjustments for over 60 tax provisions in the plan. Here are a few that will directly affect your taxes for tax year 2023.
The standard deduction for married couples filing joint will raise to $27,700 an increase of $1800
Single payers and those married filing separate will see an increase in the standard deduction by $900; the standard deduction will be $13,850
Heads of Household will see a $1400 increase in their standard deductions for tax year 2023; it will be $20,800
The marginal rates for 2023 will have the top tax rate for single individuals making over $578,125 and married couples making over $693,750 at 37%
24% for single taxpayers making over $95,375 and married couples making over $190,750
22% for single taxpayers making over $44,725 and married couples making over $89,450
Tax year 2023 willl also see an increase in the Earned Income Credit rising from $6935 to $7430 for taxpayers with 3 or more qualifying children.
These are just a few of the big changes that will be happening in tax year 2023. If you want to see more of the IRS's plans for 2023 click the button below. If you are ready to make a tax plan and talk to an advisor on how to best plan for your future and prepare for taxes, please head over to our SERVICES page and set up a free consultation.