A view of an IRS 1040 Tax Form on a Laptop computer screen being prepared for an electronic filing.
A new IRS policy change means many Americans could get bigger refunds in their pockets this year.
The IRS updated its standard deductions rule for the 2023 tax year to add on $900 for single filers. Meanwhile, married couples filing jointly will see their standard deduction rise by $1,800.
For single filers, that brings the full standard deduction to $13,850, while married couples see a standard deduction of $27,700.
“It’s a win-win for both the IRS and taxpayers,” Alex Beene, a financial literacy instructor for the state of Tennessee, told Newsweek.
Standard deductions are intended to rise with inflation—and since inflation has remained stubbornly at 3.1 percent for January, many Americans are still feeling the hit on their grocery, housing and gas prices.
“By adjusting the deduction upwards, the IRS helps ensure that taxpayers’ purchasing power is not eroded by inflation,” Zack Hellman, the owner of Tax Prep Tech, told Newsweek.
While Americans won’t necessarily see the standard deduction show up as a refund, the amount of money you can earn before it becomes taxable will save you money in the long run.
“The extra $900 this year won’t necessarily come to you in money back like a refund, but it will help to lower your taxable income and, more importantly, make the process of filing taxes vastly easier,” Beene said.
Nearly a decade ago, millions of Americans filed taxes with itemized deductions, which took extra time and energy for both taxpayers and the IRS. That means the extra money in the standard deduction can go a long way, Beene said, as roughly 90 percent of tax filers claim the standard deduction.
“Now, with the overwhelming majority of taxpayers using the standard deduction, it saves time on both ends and just makes more sense for many Americans to use,” Beene said.
Generally, renters are quick to take advantage of the standard deduction, since homeowners with mortgage interest and real estate taxes might be more likely to itemize their specific deductions. That means renter taxpayers could benefit more from the adjustment this year.
“Renters now have a larger deduction without the ownership issue,” Eric Green, top national tax attorney at Green & Sklarz and owner of The Tax Rep, told Newsweek. “I don’t know that it equalizes it but it certainly helps those who don’t own a home or financially are blocked out of homeownership.”
More Tax Changes This Year
Keep in mind, taxpayers who are age 65 or older or blind can get an extra standard deduction. For the 2023 tax year, the additional amount was $1,850 for single filers and $1,500 for married people.
In addition to its standard deduction rate, the IRS updated its income tax brackets as well. The changes will likely see smaller tax bills.
For example, those filing individually with an income of $44,000 will only be taxed 12 percent, whereas the same taxpayer would have been taxed 22 percent for tax year 2022.
The upcoming tax deadline is April 15, so Americans should make sure their forms are in by that date. The IRS expects more than 128 million returns to be filed before then.
Related Articles
Start your unlimited Newsweek trial
News Related
-
Anyone who’s purchased gift baskets to hand out to loved ones this holiday season might need to find a backup present after the latest food recall that involves festive cookies. Gift basket company Wine Country Gift Baskets just announced that it is voluntarily recalling all gift baskets that feature Acorn Baking ...
See Details:
Recall Just Announced For Popular Cookies Featured In Holiday Gift Baskets
-
LOS ANGELES: Quarterback Jalen Hurts ran in an overtime touchdown to give the Philadelphia Eagles a 37-34 NFL win over the Buffalo Bills Sunday (Monday in Manila) and move them to 10-1 on the season. The Eagles, who lost the Super Bowl to Kansas City last season, trailed at half-time ...
See Details:
Eagles rally past Bills in overtime as Chiefs win
-
Yen Makabenta First word WHILE UN Secretary-General Antonio Guterres and other promoters of the climate emergency are preparing to convene the 28th conference of the parties (COP28) of the UN Framework Convention on Climate Change (UNFCCC) in the United Arab Emirates, starting on November 30 and stretching to December 12, ...
See Details:
Reality bites the green energy agenda
-
Sandigan orders Marcos Sr. pal to pay workers The Sandiganbayan has ordered the enforcement of a July 2023 ruling ordering a Marcos Sr. associate to pay a lumber company’s workers P2.1 million in damages as well as return 60 percent of their company’s shares and pay all unpaid benefits. The ...
See Details:
Sandigan orders Marcos Sr. pal to pay workers
-
DSWD: Shear line, LPA affect 1.2 million people; over 18,000 families evacuated MANILA, Philippines – More than 18,000 families have fled to evacuation centers across flood-affected regions in the country due to the impact of the shear line and low pressure area. Department of Social Welfare and Development (DSWD) gave ...
See Details:
DSWD: Shear line, LPA affect 1.2 million people; over 18,000 families evacuated
-
-
MANILA, Philippines: The entire Luzon, including Metro Manila, is expected to experience isolated rain showers and thunderstorms as the northeast monsoon (“amihan”) and easterlies will be affecting the country over the next 24 hours, the state-run weather agency said on Tuesday. Weather specialist Patrick del Mundo of the Philippine Atmospheric ...
See Details:
Rain showers, thunderstorms over Luzon, including Metro Manila — Pagasa
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
'Naruto' live-action film adaptation is in the works
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
NASA Highlights Stingray Nebula
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Manila's Lagusnilad underpass opens
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
China probes debt-ridden financial giant
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
China's VUCA situation
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Unraveling the mystery that is diabetes
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Bangladesh's nuke plant is not going to steal PH investments
OTHER NEWS
ALIW Awards Foundation Inc. President Alice H. Reyes has released the names of finalists for the 2023 Aliw Awards to be presented on Dec. 11, 2023, at the Manila Hotel ...
Read more »
WhatsApp Web gains the feature of single-view photos and videos (Photo: Unsplash) The WhatsApp Web, the desktop version of the popular messaging app from Meta, has received an update allowing ...
Read more »
Young athletes’ time to shine in Siklab Awards MANILA, Philippines — The future heroes of Philippine sports will be honored during the third Siklab Youth Sports Awards on Dec. 4 ...
Read more »
Graphics by Jannielyn Ann Bigtas A local government official said Monday that five to 10 barangays in Northern Samar are still isolated following the massive flooding in the area last ...
Read more »
DyipPay app lets you pay jeepney fare, book tricycles “Barya lang po sa umaga.” Everyone who rides jeepneys knows this rule: it may not be an actual law, but it’s ...
Read more »
Updated In-Season Tournament Bracket ahead of pool play finale Tuesday will mark the last day of pool play for the inaugural NBA In-Season Tournament. From there, six first-place teams and ...
Read more »
PCG forms teams for maritime emergency response MANILA, Philippines — Recent incidents of fishermen lost in the waters off Southern Tagalog have prompted the Philippine Coast Guard (PCG) to form ...
Read more »