Dread the thought of coughing up more money when next year's tax bill comes due? Good news: The Internal Revenue Service is making its largest adjustment to the standard deduction since 1985, when the IRS began annual inflationary adjustments.
The IRS is increasing the standard deduction for tax year 2023 to $13,850 for individuals and $27,700 for married couples.
Even better, workers should be seeing less of a tax pinch soon, as the IRS raises 2023 income thresholds for all tax brackets. Taxpayers will see the change reflected in withholding statements on paychecks beginning in January, which means more take-home pay. While that might be going toward buying goods that cost more thanks to inflation, a little more money in your pocket can't be a bad thing.
The IRS tax changes for 2023 come on the heels of a large cost of living adjustment announced by the Social Security Administration last week. Social Security benefits will be boosted 8.7% in 2023, the biggest increase in four decades.