![]() Single and married individuals filing separately will see the standard deduction rise to $13,850, up from $12,950 in 2022. Married taxpayers were entitled to a standard deduction of $25,900 in 2022-that number is expected to jump to $27,700 in 2023. Since the doubling of the deduction due to tax reform, today, nearly 90% of taxpayers file using the standard deduction. 2023 Standard Deductionįor one, taxpayers will see a bump in the standard deductions. What will inflation mean for your 2023 tax picture? “We predict that inflation-adjusted amounts in the tax code will increase significantly in 2023 compared to prior years due to the economic environment,” said Heather Rothman, vice president for Analysis & Content at Bloomberg Tax. (For more on inflation and the CPI, including a look at how the chained CPI works, check out this previous article.)īloomberg Tax’s projected US tax rates forecast that inflation-adjusted amounts in the tax code will increase by roughly 7.1% from 2022, more than double last year’s increase of 3%. This is important information for taxpayers because the Tax Code provides for mandatory annual adjustments to certain tax items based on inflation. ![]() It’s the most widely used measure of inflation since, as prices go up, the purchasing power of your dollar goes down. The CPI measures the cost of goods and services in urban areas-in other words, your cost of living. And those rates could impact your 2023 tax picture. However, inflation remains a concern because over the last 12 months, the index rose 8.3% before seasonal adjustment. The US Bureau of Labor Statistics reported that the consumer price index increased just 0.1% for August after no change in July.
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