They are responding to pressures of inflation.
The Internal Revenue Service announced Tuesday that it is raising the income threshold for all tax brackets and will also increase the standard deduction. Officials say they are helping Americans protect their income from rapidly rising food, gas, and energy prices.
Those thresholds will increase by about seven percent overall. The standard deduction will rise to $27,700 for couples, an increase of $1,800 from this year. For individuals, it will be a $900 increase to $13,850.
The maximum amount people can contribute to their health savings account will increase from $2,850 to $3,050.
Families with three or more children will also see an increase in the earned income tax credit, rising from $6,935 to $7,430.
The inflation adjustments are incremental and announced every year, but due to record inflation, the adjustments are unusually high. This is the largest adjustment in standard deductions since 1985.
The income thresholds per tax percentage rate will also be raised. The adjustments will be made for the year 2023 and will be applied to tax returns filed in 2024.
As the Lord Leads, Pray with Us…
- For Commissioner Rettig to seek God’s leading as he heads the IRS.
- For IRS officials as they implement the changes to income tax brackets and deductions.
- For the president and his administration as they set policies regarding the economy.
Sources: Wall Street Journal, CBN, CNN
