SAINT LOUIS, Mo. — Consumers are painfully aware of inflation, but there are some bright spots this tax season.
Lei Deng works as a financial planner and owns Savor Financial, which mostly serves immigrants and entrepreneurs. She said this year, the IRS adjustments should be a nice surprise in our paychecks.
"Hopefully you don't feel the pinch of more tax dollars flowing out of your income," Deng said. "You can keep more or a similar amount to buy your eggs, buy your milk and use (the increase) in your everyday life."
While it's not a raise, it is significant. The IRS adjusts certain tax benefits every year, but for tax year 2023, it's the most the organization has done in many years.
Your tax refund could also be bigger. For example, in 2022, a person filing as "single" earning between about $41,089 paid about 22% of their income to the IRS. But in 2023, the tax bracket bumped it to a little more than $44,095. The math is about a 7% change. There are other differences as well, like more money for energy efficiency improvements and bigger tax credits for families.
"If you're a family with three kids, it's $7,430," said Lisa Greene-Lewis, CPA and tax expert with Turbotax.
And we can look forward to these inflation adjustments throughout the year. The standard deduction will be going up, which is a benefit for taxpayers.
"With inflation, a lot of the maximum for the retirement accounts actually have increased as well," Greene-Lewis said.
These are all things to keep in mind when you're trying to make every cent count. It won't make you rich, but hopefully the adjustments will ease the pinch.
"So that doesn't mean you can buy more things," Deng said. "You're just keeping up with inflation."
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