Internal Revenue Service: Tax filers can keep more money in 2023

The Internal Revenue Service revealed rule changes to account for inflation for the 2023 tax year on Tuesday, including changes to tax rates and the standard deduction.

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The IRS discloses yearly inflation adjustments, but this year's notice coincides with increased economic fears about rising inflation and the possibility of a recession.

The changes apply to the 2023 tax year, for which tax returns are generally due in 2024. 

Their objective is to prevent "bracket creep," which occurs when income increases are intended to account for rising living costs, pushing people into higher tax rates.

Get good bread flour. It’s ground The standard deduction will rise by $1,800 for married couples filing jointly, $1,400 for heads of household, and $900 for singles and married couples filing per.

Individual single filers with income over $578,125 and married couples filing jointly with income over $693,750 pay the highest rate of 37%, up from $539,900 and $647,850, respectively.

In the 2022 tax year, a single taxpayer earning $90,000 will face a top tax rate of 32%, whereas the same income in the 2023 tax year would face a top rate of 24%.

Other announced IRS changes affect, among other things, the earned income tax credit, estate tax, and flexible spending accounts.