The IRS’ standard deduction thresholds have been upped for 2023, meaning that you may no longer be eligible to pay federal income tax on your earnings.
As we approach the end of the year, some will already be looking ahead to 2023 and the upcoming tax season in the United States. Most of the pandemic-era tax relief initiatives have now ended and we’re back to normality when it comes to tax filing.
However not everyone is required to file a return with the IRS and low earners will not have to pay tax. If your total earnings are less than the standard deduction amount, then you will not be required to declare taxes.
The term ‘standard deduction’ is the earnings threshold below which you will not have to pay tax on your income. This either means that you can reduce your tax bill, or it could free you from income tax entirely.
For 2023 the IRS has upped the standard deduction thresholds significantly, meaning that more people will not be required to pay federal income tax:
– Single; or married and filing separately – $13,850
– Married filing jointly and Surviving spouses – $27,700
– Head of household – $20,800
If your earnings are less than those thresholds, then you will not be required to file a tax return in 2023. However, there are some federal financial relief programs that require you to do so to claim the support.
What is the additional standard deduction?
Some earners are eligible for a slightly increased standard deduction, meaning that they can reduce their tax obligation or avoid federal income taxes entirely. If you are registered as blind or are aged 65 or older, you can claim the additional standard deduction.
This amount is added to the regular standard deduction to increase the threshold for eligible taxpayers:
Married Filing Jointly or Married Filing Separately
– Either 65 or older or blind – $1,500
– Both 65 or older and blind – $3,000
Single or Head of Household
– Either 65 or older or blind – $1,850
– Both 65 or older and blind – $3,700
For more information on how to calculate your standard deduction for 2023, head over to the IRS’ preliminary instructions help page. If you have any problema or doubt, please do not hesitate to contact us directly by phone +34 5194392 US Tax Consultants