Inflation Adjustments for 2023
The IRS recently announced that they have made over 60 inflation adjustments for 2023. As one of the leading accounting firms in Nashville, we want to make sure our clients understand these updates. These include increases in:
- Unearned Income of Minor Children Subject to the “Kiddie Tax
- Maximum Capital Gains Rate
- Adoption Credit
- Child Tax Credit
- Earned Income Credit.
To see all the changes, refer to Revenue Procedure 2022-38.
PHB Knows All the Inflation Adjustments for 2023
Every year the tax code changes. The tax professionals at PHB CPA’s are always up on the latest changes. We have to know what these changes are so they can give our clients the best service. If you have questions about the 20222 or 2023 tax code, please call us today for an appointment. As an experienced CPA firm, we can provide support and assistance in all your tax, financial, and business affairs.
Standard Deductions for 2023
Changes to 2023 tax provisions include increases in the standard deduction for married couples and single individuals. The standard deduction for married couples filing jointly is $27,700, which is a little over a 6.9% increase of $1,800. For single taxpayers and married individuals filing separately, the standard deduction is $13,850. This is a little over a 6.9% increase of $900. For heads of household, the standard deduction will be $20,800, which is a little over a 7.2% increase of $1,400.
Income Brackets and Tax Rates
The first question most people have is “what income bracket am I in? — followed by the question “what is the tax rate for that bracket?” Below are the income brackets and tax rates for the categories of “married filing jointly or surviving spouse” and “heads of households.” See Revenue Procedure 2022-38 for the other filing categories.
Married Individuals Filing Joint Returns and Surviving Spouses
|Taxable Income||Tax Due|
|not over $22,000||10%|
|more than $22,000 but less than $89,450||$2,200 plus 12% of the excess over $22,000|
|more than $89,450 but less than $190,750||$10,294 plus 22% of the excess over $89,450|
|more than $190,750 but less than $364,200||$32,580 plus 24% of the excess over $190,750|
|more than $364,200 but less than $462,500||$74,208 plus 32% of the excess over $364,200|
|more than $462,500 but less than $693,750||$105,664 plus 35% of the excess over $462,500|
|more than $693,750||186,601 plus 37% of the excess over $693,750|
Heads of Households
|not more than $15,700||10%|
|more than $15,700 but less than $59,850||$1,570 plus 12% of the excess over $15,700|
|more than $59,850 but less than $95,350||$6,868 plus 22% of the excess over 59,850|
|more than $95,350 but less than $182,100||$14,678 plus 24% of the excess over $95,350|
|more $182,100 but less than $231,250,||$35,498 plus 32% of the excess over $182,100|
|more than $231,250 but less than $578,100||$51,226 plus 35% of the excess over $231,250|
|more than $578,100||$172,623 plus 37% of the excess over $578,100|