WEST PALM BEACH, Fla. — Less of your income going to taxes. That will be the case for many Americans following the inflation adjustments announced by the IRS.
Inflation has increased the cost of just about everything. But the IRS is offering some relief in the form of its annual tax adjustments.
A spokesperson for the IRS said the Consumer Price Index gave a clear indication that rate amounts needed to change, lowering tax bills for many Americans.
So one big impact will be your standard deductions. Those that take the standard deduction will see it increase by $900 in 2023. So you will be deducting $13,850 as an individual and double that for couples.
The other change will be who is eligible for which tax bracket. For many, it means a drop in the amount you're paying the government. Those brackets are increasing by 7%.
An expert in finance at Florida Atlantic University said it may not be enough right now, but added it's easier for the IRS to make larger adjustments in the future than backtrack the adjustments this year.
The IRS said it's hoping to release pension limits next week.