I am running way behind on posting but trying to quickly catch up.
The Treasury/IRS has issued the new tax rates going forward and also updated child tax credits and other related tax items for inflation.
Single Filing Individual Return (other than surviving spouses and heads of households)
Tax Rate2023 Taxable Income2022 Taxable Income
10%$0 to $11,000
$0 to $10,275
12%
Over $11,000 to $44,725
Over $10,275 to $41,775
22%
Over $44,725 to $95,375
Over $41,775 to $89,075
24%
Over $95,375 to $182,100
Over $89,075 to $170,050
32%
Over $182,100 to $231,250
Over $170,050 to $215,950
35%
Over $231,250 to $578,125
Over $215,950 to $539,900
37%Over $578,125
Over $539,900
Married Filing Joint Returns (and surviving spouse)
Tax Rate2023 Taxable Income2022 Taxable Income
10%$0 to $22,000
$0 to $20,550
12%
Over $22,000 to $89,450
Over $20,550 to $83,550
22%
Over $89,450 to $190,750
Over $83,550 to $178,150
24%
Over $190,750 to $364,200
Over $178,150 to $340,100
32%Over $364,200 to $462,500
Over $340,100 to $431,900
35%Over $462,500 to $693,750
Over $431,900 to $647,850
37%
Over $693,750
Over $647,850
Married Filing Separate Returns
Tax Rate2023 Taxable Income2022 Taxable Income
10%$0 to $11,000
$0 to $10,275
12%Over $11,000 to $44,725
Over $10,275 to $41,775
22%Over $44,725 to $95,375
Over $41,775 to $89,075
24%
Over $95,375 to $182,100
Over $89,075 to $170,050
32%
Over $182,100 to $231,250
Over $170,050 to $215,950
35%Over $231,250 to $346,875
Over $215,950 to $323,925
37%
Over $346,875
Over $323,925
Heads of Households
Tax Rate2023 Taxable Income2022 Taxable Income
10%
$0 to $15,700
$0 to $14,650
12%Over $15,700 to $59,850
Over $14,650 to $55,900
22%Over $59,850 to $95,350Over $55,900 to $89,050
24%Over $95,350 to $182,100
Ove r$89,050 to $170,050
32%
Over $182,100 to $231,250Over $170,050 to $215,950
35%
Over $231,250 to $578,100Over $215,950 to $539,900
37%
Over $578,100
Over $539,900
Standard Deduction Raised
Revenue Procedure 2022-38 also stated that among tax deduction and exemption changes for 2023:
The standard deduction for single taxpayers and for married taxpayers filing separately will rise by $900 to $13,850, up from $12,950.
The standard deduction for married taxpayers filing joint returns will rise by $1,800 to $27,700, up from $25,900.
The standard deduction for heads of households will rise by $1,400 to $20,800, up from $19,400.
"This is the largest automatic adjustment to the standard deduction since core features of the tax system were first indexed to inflation in 1985," The Wall Street Journal reported.
Taxpayers can claim a standard deduction when filing their tax returns, thereby reducing their taxable income and the taxes they owe.
The standard deduction also ensures that only households with income above certain thresholds will owe any income tax.
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These changes aren't bad but also aren't substantially of help to taxpayers struggling with Inflation.
I will be posting my annual tax year wrap up list which delineates some sensible steps to follow up on to get the most out of this year's ending. The 4th Qtr still provides time to take advantage of certain tax saving strategies. The clock continues to April 15 2023 for IRA Contributions and I thnk that's a must if you have the free cash. Here is an excellent article on what you could reap over time:
https://www.forbes.com/advisor/retirement/max-out-retirement-savings/
OK, I'll be posting again soon and definitely have a few comments on the upcoming midterm elections.
Best,
Donn Marier
DM-Your Own CFO