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The IRS this week announced higher federal income tax brackets and standard deductions for 2023 amid soaring inflation.
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 is due on each part 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’s also a higher income tax credit that enables write-offs of up to $7,430 for low- and moderate-income filers. Employees can wire $3,050 into a Health Flexible Spending Account.
While the agency hasn’t released 2023 limits for 401(k) and IRA accounts, experts predict the IRA’s limit for savers under 50 will jump to $6,500.