The short answer is “yes.” On October 18, 2022, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2022-38 (the “Procedure”). This Procedure adjusted certain dollar amounts related to tax items due to inflation. What you may not know is that certain dollar amounts contained in the tax code are subject to inflation. This means the IRS will adjust these items on a yearly basis to take into account inflation.
As we all know, inflation has hit an all-time high this year, and costs continue to rise with no end in sight. However, one piece of good news is that the Procedure adjusts the individual tax brackets and many more items for the 2023 tax year to take into account this inflation. This means there is a possibility that you may see a slightly larger refund or slightly less amount due when you file your 2023 tax return.
The Standard Deduction
The standard deduction for a married couple filing jointly increased to $27,000, which is up $1,800 from the previous year.
For single taxpayers and married individuals filing separately, the standard deduction increased to $13,850, which is up $900.00.
For head of households, the standard deduction will be $20,800, which is up $1,400 from last year.