Inflation is hitting Americans where it hurts — their wallets and emotional well-being as they try to keep up with the rising cost of living.
Despite this surge, there is one sliver of a silver lining: some taxpayers will be able to keep more money in 2023 thanks to the IRS’ adjusted tax brackets and increased deductions, designed to counter heavy inflation on groceries, gas, and other staple daily life expenses.
The IRS announced Tuesday that tax brackets will increase by about 7%, resulting in lower brackets for Americans whose wages haven’t followed inflation, ultimately owning less when they file.
For married couples, the standard deduction will increase to $27,700, up $1,800 from last year. As for single filers, it will be $13,850, an increase of $900. This is a significant increase over the previous year’s standard deduction hikes, which were $800 for married filers and $400 for singles.
Standard deductions for Heads of Household will increase by $1,400 to $20,800 for the 2023 tax year.