01/11/2024
Now that we know the official tax season opening date here are some reminders about 2023 deductions, credits and tax rates.
The standard deduction for married couples filing jointly rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
The additional standard deduction amounts for taxpayers who are 65 and older or blind are $1,850 for single or head of household (increase of $100) and $1,500 for married taxpayers or qualifying surviving spouse (increase of $100).
The Child Tax Credit (CTC) is worth $2,000 per qualifying dependent child if your modified adjusted gross income is $400,000 or below (married filing jointly) or $200,000 or below (all other filers). The refundable portion, also known as the Additional Child Tax Credit (ACTC), is worth up to $1,600.
The maximum Earned Income Tax Credit (EITC) amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 for tax year 2022.
The top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly). The other rates are:
35% for incomes over $231,250 ($462,500 for married couples filing jointly);
32% for incomes over $182,100 ($364,200 for married couples filing jointly);
24% for incomes over $95,375 ($190,750 for married couples filing jointly);
22% for incomes over $44,725 ($89,450 for married couples filing jointly);
12% for incomes over $11,000 ($22,000 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).
If you have any questions, or would like to schedule an appointment, feel free to give us a call at 508-399-8270.
Have a great day.
Sources: IRS.gov, nerdwallet.com