Name: IRS Releases Inflation Adjustments for 2023 Taxes: Here's What It Means for You
Uploaded: 2022-10-20T06:16:02.000Z
Description: As the cost of living has soared for Americans battling against chronic inflation, the Internal Revenue Service (IRS) may be bringing some welcome relief.

NTD Newsroom comprises teams of reporters, editors, and producers assigned to cover breaking news and other stories.


NTD Newsroom

Mari Otsu is NTD's White House correspondent based in Washington. 

Mari Otsu

News

US News

Trump Says He and Xi Spoke ‘A Lot’ About Taiwan, Minimizes Chances of Conflict

Iris Tao is NTD's White House correspondent based in Washington. Prior to her work at the White House, Iris reported on U.S. politics and U.S.–China relations from NTD’s New York headquarters. She holds degrees in journalism and economics from Boston University.

Iris Tao

NTD Plus

The Capitol Report is a political news show based in Washington D.C. We provide the world with a direct channel to the voices and people who shape policy in America. Capitol Report features all of the political news of the day with expert interviews and analysis.

Capitol Report

Sen. Ron Johnson Discusses Whistleblower Testimony on COVID

Steve Lance is NTD's Washington D.C. Bureau Chief and chief political correspondent. Steve anchors NTD's "Capitol Report," a political news show based in the nation's capital aimed at providing a direct channel to the voices and people who shape policy in America. Steve also co-moderates NTD's special election coverage "The Nation Decides."

Steve Lance

No One Should Be in Favor of Allowing Regime to Allow Organ Harvesting: Rep. Nunn

Melina Wisecup is NTD's congressional correspondent based in Washington, covering Capitol Hill and campaign politics.

Melina Wisecup

Panel Discusses Trump Administration’s Crackdown on Medicare Fraud

US Changing Global Dynamics, Pivoting Countries out of China’s Sphere of Influence: China Expert

CCP Fears Religious Freedom More Than Anything: Former US Ambassador-at-Large

The Associated Press is an American not-for-profit news agency headquartered in New York City. 

The Associated Press

China News

Trump Arrives in Beijing for Talks With China's Xi on Iran War, Trade, US Arms Sales to Taiwan

House CCP Committee Chair Commends Law Enforcement for Uncovering California Mayor as CCP Spy

Panel Discusses the Failures of Ship Operators in Key Bridge Collapse

Decreasing Crime Rates in Certain Cities Shows Trump's Policies Working: Former NYPD Detective

Capitol Report Full Broadcast (May 15)

Capitol Report Full Broadcast (May 14)

Capitol Report Full Broadcast (May 13)

Capitol Report Full Broadcast (May 12)

Capitol Report Full Broadcast (May 11)

Capitol Report Full Broadcast (May 8)

Capitol Report Full Broadcast (May 6)

Capitol Report Full Broadcast (May 5)

Capitol Report Full Broadcast (May 4)

Capitol Report Full Broadcast (May 1)

Fast, compelling, first-hand news from China. China in Focus airs Monday–Friday at 8 p.m. ET.

China in Focus

China Sends Warships to Pacific Drill as Tensions With Japan Rise

Reuters is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages.

Reuters

We present news that is truthful and based on facts, outside of the political fog. Instead of focusing on the negative things happening around us, our mission is to give our viewers a good morning with empathetic and uplifting stories. Our aim is to provide an antidote to negativity by shining a light on the best side of people. We speak to inspiring people who positively impact communities, pursue topics that represent our common human values, and will never miss an opportunity to bring you heartwarming stories.

NTD Good Morning

2 US Embassy Personnel Assigned to Cartel Case Killed in Car Accident

Gunman Kills 8 Children, Including 7 of His Own, in Louisiana Mass Shooting

Flora Hua is a reporter based at NTD's global headquarters in New York City, where she covers China news, U.S.-China relations, and human rights issues. Flora primarily contributes to NTD's "China in Focus."  

Flora Hua

Trump: Seized Iranian Ship May Have ‘A Gift From China’

Joseph Lord is a congressional reporter for The Epoch Times.


Joseph Lord

Aldgra Fredly is a freelance writer covering U.S. and Asia Pacific news for The Epoch Times.

Aldgra Fredly

Former NYC Mayor Rudy Giuliani Hospitalized in Critical Condition: Spokesman

Wildfires Across Georgia and Florida Have Destroyed Nearly 50 Homes and Are Forcing Evacuations

News you can trust from the U.S. and around the world. Critical information and insight. We cover the stories that others don’t. NTD News Today airs Monday–Friday at 11 a.m. ET.

NTD News Today

US Warns of China Hacks via Routers, Smart Devices

Juliet Song is an international correspondent exclusively covering China news for NTD. She primarily contributes to NTD's "China in Focus," covering U.S.-China relations, the Chinese regime's human rights abuses, and domestic unrest inside China.

Juliet Song

2 Americans Among Suspected Communist Rebels Killed in Clashes With Troops, Philippine Officials Say

Ryan Morgan is a reporter for The Epoch Times focusing on military and foreign affairs. He was previously a news writer for NTD. 


Ryan Morgan

World News

Middle East

Iran

3 US Warships Fend Off Iranian Attacks, Trump Says Ceasefire Still Holds

Health News

3 Dead in Suspected Hantavirus Outbreak on Cruise Ship in Atlantic Ocean: WHO

As the cost of living has soared for Americans battling against chronic inflation, the Internal Revenue Service (IRS) may be bringing some welcome relief.

The federal agency <a href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023">announced</a> on Oct. 18 a string of new annual inflation adjustments that will impact the 2023 tax year, potentially bringing a boost to your paycheck, particularly if your salary hasn't kept up with the increasing cost of living.

Tax rates are typically adjusted for inflation annually by the IRS, so this is nothing new; but with red-hot inflation currently at a 40-year high in the United States, this year's changes are likely to feel more significant for millions of Americans.

The adjustments will impact individual income tax brackets, deductions, and credits for next year, potentially bringing relief to taxpayers who may now fall into lower tax brackets.

Here are the changes announced by the IRS, effective for the 2023 tax year:
<h2>Standard Deduction</h2>
The standard deduction is typically used by most people who don't itemize their taxes and reduces the amount of income you must pay taxes on.

Under the new annual inflation adjustments announced by the IRS, the standard deduction for married couples filing jointly in 2023 is $27,700, up $1,800, or 7 percent from the prior year.

For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for the tax year 2023, up $1,400 from 2022, marking a 7.2 percent increase.
<h2>Tax Brackets</h2>
For the tax year 2023, the top marginal rate, or the highest tax rate based on income, remains 37 percent for individual single taxpayers with incomes greater than $578,125, or $693,750 for married couples filing jointly.

The lowest rate is 10 percent, and applies to single individuals with incomes of $11,000 or less and married couples earning $22,000 or less.

The other rates are: 35 percent for incomes over $231,250 (or $462,500 for married couples filing jointly), 32 percent for incomes over $182,100 (or $364,200 for married couples filing jointly), 24 percent for incomes over $95,375 (or $190,750 for married couples filing jointly), 22 percent for incomes over $44,725 (or $89,450 for married couples filing jointly), and 12 percent for incomes over $11,000 ($22,000 for married couples filing jointly).
<h2>Earned Income Tax Credit</h2>
The maximum amount for households who claim the earned income tax credit will be $7,430 for the tax year 2023 for individuals who have at least three children. In the tax year 2022, or the current tax year, this was $6,935, according to the IRS.
<h2>Flexible Spending Arrangements</h2>
A flexible spending account, also known as a <a href="https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/">flexible spending arrangement</a>, allows workers to contribute a portion of their regular earnings, up to a limit set by the IRS, into an account that can be used to pay for certain health care costs. Given that the funds taken from the account are not subject to income and payroll taxes, they offer specific tax advantages

For the taxable years beginning in 2023, the dollar limitation for employee salary reductions for flexible spending arrangement contributions increases to $3,050, up from the current tax year's threshold of $2,850.
<h2>Other Notable Adjustments</h2>
These include the annual exclusion for gifts, which increased to $17,000 for the calendar year 2023, up from $16,000 for the calendar year 2021.

For the tax year 2023, the monthly limitation for the qualified tax-free public transit and parking costs will also increase, to $300, up $20 from this year.

The heirs (or estates) of wealthy Americans who die during 2023 will also see some tax relief, with the IRS exempting up to $12.92 million from the estate tax, up from $12.06 million in 2022.

"The changes seem to be much larger than previous years because inflation is running much higher than it has in previous decades," Alex Durante, an economist at the Tax Foundation, a think tank based in Washington, D.C., <a href="https://www.marketwatch.com/story/high-inflation-just-pushed-irs-deductions-and-tax-rates-higher-heres-how-much-and-when-they-kick-in-11666133882">told</a> Market Watch.

Durante explained that the IRS establishes its inflation adjustments by averaging a "chained Consumer Price Index," an alternative measurement for the Consumer Price Index (CPI).

"The reason they do this is because the regular CPI is thought to overstate inflation because it doesn’t take into account the substitution that shoppers can make as costs rise," Durante said, pointing to consumers swapping higher-priced items for cheaper ones.

The IRS inflation adjustments come after <a href="https://www.theepochtimes.com/us-inflation-remains-persistently-high-at-8-2-percent-fueled-by-high-rent-and-food-prices_4793595.html" target="_blank" rel="noopener">data</a> published by the Bureau of Labor Statistics last week showed that inflation remained persistently high, at 8.2 percent in September, down just slightly from 8.3 percent in August. This was higher than the 8.1 percent markets had anticipated.

<em>From <a href="https://www.theepochtimes.com/irs-releases-inflation-adjustments-for-2023-taxes-heres-what-it-means-for-you_4805820.html">The Epoch Times</a></em>

Programs

economy

Videos

Business News

04_Top Stories

taxes

inflation

Latest Clips

Inflation

Katabella Roberts is a former writer for The Epoch Times, focusing primarily on the U.S., world, and business news.

Katabella Roberts

Latest and breaking news, documentaries, movies, and lifestyle content on NTD+.
 
Empower your knowledge and elevate your spirit with NTD+, your go-to destination for truthful news, insightful documentaries, and captivating lifestyle content that enriches your life.