Here’s What the Change in US Tax Brackets Means for Your Wallet

  • Taxpayers will get larger standard deductions for 2023, shielding more of their income from taxation.
  • Income tax bracket levels will be revised upward, meaning those whose wages haven’t kept pace with inflation will likely fall into a lower bracket.
  • The adjustments come as inflation accelerated in September, with the Consumer Price Index rising 0.4% last month after just 0.1% in August.

Taxpayers will get larger standard deductions for 2023, and all seven federal income tax bracket levels will be revised upward as the government allows people to shield more of their money from taxation because of persistently high inflation.

For couples who file jointly for tax year 2023, the standard deduction increases to $27,700 up $1,800 from tax year 2022, the IRS announced. Single taxpayers and married people filing separately will see their standard deduction rise to $13,850, up $900, and for heads of households, the standard deduction will be $20,800, up $1,400.

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