We’re already into 2023 — now’s the time to take smart steps to trim your tax bill. The IRS adjusts brackets and deductions annually for inflation, and with rising costs, you may benefit from being in a lower bracket or claiming a larger standard deduction.
2023 Federal Tax Brackets
The IRS has updated the federal tax brackets for 2023 to account for inflation. Even if your income hasn’t changed, your taxable bracket may shift lower.
Standard Deduction & Additional Allowances
For 2023, the standard deduction is higher across filing statuses. Plus, taxpayers who are 65 or older or blind may claim an additional deduction: $1,500 (or $1,850 for single/head of household). If you’re a dependent, your deduction is limited to $1,250 or your earned income plus $400 — whichever is greater, but not exceeding the base standard deduction.
Proactive Tax Planning Tips
- Accelerate or delay income as appropriate based on your projected bracket
- Max out retirement contributions (IRA, 401(k)) where possible
- Consider bunching deductions (medical, charitable) into strategic years
- Stay aware of changes in tax credits and phase-outs
Tax law is always evolving. If you'd like help interpreting how these changes affect you or mapping a tax plan for 2023, contact Grants Pass Tax Service today.
