Here are the changes unveiled by the IRS on Tuesday. The inflation-adjusted elements will apply to the 2023 tax year, meaning returns filed in 2024.

Standard deduction

The standard deduction, which reduces the amount of income you must pay taxes on, is claimed by a majority of taxpayers.

It will rise to $27,700, up from $25,900, in 2023 for married couples filing jointly, roughly a 7% bump. For individuals, the new maximum will be $13,850 for 2022, up from $12,950, the IRS said.

Heads of households will see their standard deduction jump to $20,800 in 2023 from $19,400, an increase of about 7.2%.

Tax brackets for single individuals:

The IRS is increasing the tax brackets by about 7% for both individual and married filers across the different income spectrums. The top tax rate remains 37% in 2023.

10%: Taxable income up to $11,000 or less 12%: Taxable income over $11,000 22%: Taxable income over $44,725 24%: Taxable income over $95,375 32%: Taxable income over $182,100 35%: Taxable income over $231,250 37%: Taxable income over $578,125

Tax brackets for joint filers:

10%: Taxable income up to $22,000 12%: Taxable income over $22,000 22%: Taxable income $89,450 24%: Taxable income $190,750 32%: Taxable income $364,200 35%: Taxable income $462,500 37%: Taxable income over $693,750

Other tax provisions

The IRS increased the thresholds for several other provisions, including the earned income tax credit amount, with families now eligible to receive $7,430 if they have three or more qualifying children. That is up from $6,935 for tax year 2022.

Employees can also contribute more to their health flexible spending accounts, with the maximum contribution rising to $3,050.

https://www.foxbusiness.com/money/irs-sets-higher-tax-brackets-standard-deduction-2023-inflation-rages