(UnitedVoice.com) – America’s inflation woes are far from over. For more than two years, families have struggled to pay for nearly everything. Rent, housing, food, medicine, and most every other good or service have seen an increase in prices. State governments and the feds have taken steps to mitigate the impact the crisis has had on families. That will be evident in 2024, when Americans file taxes for the current year.
Marginal Tax Rates
Late last year, the IRS announced it was making inflation adjustments to dozens of tax provisions, including tax rate schedules. The top tax rate for individuals making more than $578,125 and married couples filing jointly who earned over $693,750 will remain at 37%, the highest percentage. The other income brackets and percentages are as follows:
- Individuals who earn less than $11,000 and married couples who make less than $22,000 pay 10%.
- Individuals who earn more than $11,000 and married couples earning over $22,000 will pay 12%.
- Single people making over $44,725 and married couples earning more than $89,450 will pay 22%.
- People making more than $95,375 and married couples earning over $190,750 are responsible for more than 24%.
- Individuals earning over $182,100 and married couples who make over $364,200 owe a rate of 32%.
- Those making more than $231,250 and married couples making over $462,500 will pay 35%.
Standard Deduction
Married couples who file jointly for the 2023 tax year will have a standard deduction of $27,700; that’s an increase of $1,800 from 2022. For heads of households, the deduction will increase by $1,400 to $20,800. And the standard deduction for married couples filing separately and single taxpayers will be $13,850, an increase of $900.
Earned Income Tax Credit
The EITC maximum amount will be $7,430 for taxpayers who have three or more qualifying dependant children. This is a tax credit that helps low- to moderate-income families reduce their tax burden, and sometimes, it increases the amount of their tax return.
Medical Savings Account
Individuals who have Medical Savings Account that is self-only must have an annual deductible no less than $2,650. That is an increase of $200 from 2022. The deductible also cannot exceed $3,950, a $250 increase over last year. For families, the deductible cannot be less than $5,300 or more than $7,900. That is an increase of $350 and $500, respectively.
Miscellaneous Tax Changes
The monthly limit for qualified parking, and the qualified transportation fringe benefit increases by $20 from $280 in 2022 to $300 in 2023. The Alternative Minimum Tax exemption for this year will be $81,300, but it phases out for individuals earnings who make $578,150 and married couples who file jointly with salaries equalling $1,156,300.
Anyone with questions about their deductions or burdens should contact a professional.
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