Standard deductions have increased.
The IRS makes every year based on inflation. Since that's up 8.2% since September of 2021, these changes are a bigger deal to a lot of people.
"It is going to be totally different than usual!" Jared Waterson said.
He is going through a lot of life changes. He just became a father and bought his first home this year, so he's not sure what to expect when it comes to taxes.
Inflation makes things more difficult, which is why the IRS is hoping to provide some relief.
It increased the standard deduction for single filers by $900 to $13,850 for 2023. Double that if you’re married!
"That's going to be that extra $1,800 that you get to have right in your pocket," Chris Smith, financial adviser with Edward Jones, explained.
Income tax brackets were also adjusted. It essentially tells you how much you’ll have to pay in taxes.
"The more you make, the more you're potentially going to pay," Smith said.
If you didn’t get a raise to match the high cost of living, you may be moved to a lower income tax bracket—which means less taxes.
Waterson says these changes are sure to help many.
"People will somewhat sit on more of a comfier pillow now," he said.
However, Smith warns, "The everyday cost of living is still going to grossly outweigh anything that they raise for the standard deduction award the difference in federal income tax brackets, but at least they'll have something nice to have."
That's why he recommends you speak to a financial expert or CPA to figure out what's best for you.
"Everyone has a different story. Everyone has a different setup. Everyone has different goals and what they want to accomplish and really can't give a blanket statement of advice because everybody is different and has a different situation," Smith explained.
These changes will not go into effect until next year, so you won’t be seeing the benefits until you file your taxes in 2024.
To look over more changes made by the IRS, click .
