The upcoming tax season brings several important updates that taxpayers should be aware of. Here are some of the key changes for the 2023 tax year:
- Income Tax Brackets: The income tax brackets for 2023 have been adjusted to account for inflation. There are still seven tax rates, but the income ranges for each rate have shifted slightly. Please see below for more information.
- Standard Deduction: The standard deduction amounts have been increased for 2023 to account for inflation. For example, married couples filing jointly get $27,700, up from $25,900 in 2022. Please see below for more information.
- Retirement Provisions: The government's year-end funding legislation, the SECURE 2.0 Act, contains a number of retirement provisions, with some important ones taking effect for 2023.
- Credits and Deductions: Changes have been made to various credits and deductions, including the Child Tax Credit, Earned Income Tax Credit, and new credits effective for 2023, such as the New Clean Vehicle Credit and the Used Clean Vehicle Credit.
For the 2023 tax year, the income tax brackets have been adjusted to account for inflation. The tax rates remain the same, but the income ranges for each rate have shifted. Here are the 2023 tax brackets for single filers, married individuals filing jointly, and heads of household:
- Single Filers:
- 10%: Up to $11,000
- 12%: $11,001 to $44,725
- 22%: $44,726 to $95,375
- 24%: $95,376 to $182,100
- 32%: $182,101 to $231,250
- 35%: $231,251 to $578,125
- 37%: Over $578,125.
- Married Individuals Filing Jointly:
- 10%: Up to $22,000
- 12%: $22,001 to $89,450
- 22%: $89,451 to $190,750
- 24%: $190,751 to $364,200
- 32%: $364,201 to $462,500
- 35%: $462,501 to $693,750
- 37%: Over $693,750.
- Heads of Household:
- 10%: Up to $15,700
- 12%: $15,701 to $59,850
- 22%: $59,851 to $95,500
- 24%: $95,501 to $182,100
- 32%: $182,101 to $233,350
- 35%: $233,351 to $578,125
- 37%: Over $578,125.
The standard deduction amounts have also been increased for 2023 to account for inflation. Here are the standard deduction rates for 2023:
- Single Taxpayers and Married Individuals Filing Separately: $13,850
- Married Couples Filing Jointly: $27,700
- Heads of Household: $20,800.
These updates are important for taxpayers to consider when planning for the upcoming tax season. Please reach out to us if you have any questions!