In 2023, many tax deductions have increased due to inflation adjustments, offering more savings opportunities, though no new deductions have been added and some existing ones have updated limits.
2023 Tax Deductions See Inflation-Driven Increases – Standard Deduction Up 7%, IRA and HSA Limits Raised
According to the report of The Street, in 2023, many tax deductions have increased due to inflation adjustments, which help offset rising costs. The standard deduction, for example, has gone up by about 7%. Single filers can now deduct $13,850, while married couples filing jointly can deduct $27,700. Contributions to traditional IRAs and health savings accounts have also increased, giving taxpayers a chance to save more on their taxes.
However, there are no new tax deductions this year, and some existing ones have been adjusted. For instance, the student loan interest deduction starts to phase out if your income exceeds $75,000, and medical expense deductions have limits based on your age. These adjustments help keep deductions useful as economic conditions change.
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2023 Tax Deductions Boosted by 7%: Here’s What You Need to Know – $13,850 Standard Deduction, $75,000 Income Threshold for Student Loan Interest (PHOTO: CNBC)
Maximize Your 2023 Tax Savings – How Updated Deduction Limits and Adjustments Can Impact Your Refund
Taxpayers should check these updated limits and phase-out ranges to make the most of their deductions. While some deductions, like those for charitable donations and mortgage interest, remain the same, others have been changed to match current economic situations. Understanding these updates can help people plan their taxes better and potentially save more or get a bigger refund.
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