IRS raises deductions amid inflation

Taxpayers can expect bigger standard deductions for 2023 and all seven federal income tax bracket levels will be revised upward as the Internal Revenue Service (IRS) adjusts for high inflation, according to a report from the Associated Press. Couples who file jointly for the tax year 2023 will see the standard deduction increased to $27,700 up $1,800 from the tax year 2022, and single taxpayers and married people filing separately will see the standard deduction rise to $13,850, up $900. For heads of households, the standard deduction will be $20,800, up $1,400 from the previous year. The adjustments come as inflation accelerated in September, with the Consumer Price Index rising 0.4% in September after just 0.1% in August. Inflation is up 8.2% for the past 12 months.