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  • Last modified 97 days ago (Jan. 10, 2024)

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New provisions take a little sting out of income tax

Staff writer

New regulations could make paying income tax a little less painful this year, according to the Internal Revenue Service.

Standard deductions

Standard deductions for married couples filing jointly will be $27,700, up $1,800 from the previous year.

For single taxpayers and married people filing separately, the standard deduction will be $13,850, up $900.

Standard deduction for people who file as heads of households will be $20,800, up $1,400 from the previous year.

The 2023 maximum earned income tax credit amount is $7,430 for qualifying taxpayers who have three or more children, up from $6,935 for tax year 2022.

Health accounts

Allowable health flexible spending arrangement con

tributions have increased to $3,050. If a cafeteria plan allows carryover of unused amounts to the following year, no more than $610 may be carried over.

Medical savings

Taxpayers with self-only coverage in medical savings accounts need to have an annual deductible between $2,650 and $3,950. The maximum out-of-pocket expense is $5,300.

For family coverage, the annual deductible must be between $5,300 and $7,900. The out-of-pocket expense limit is $9,650.

Foreign income

More foreign earned income can be excluded. This year’s maximum amount is $120,000, up from $112,000 for tax year 2022.

Gift exclusion

The annual exclusion for gifts received increases to $17,000 for calendar year 2023, up from $16,000 for calendar year 2022.

Adoption credits

The maximum credit allowed for adoptions for tax year 2023 is $15,950, up from $14,890 for 2022.

Tax rates

Marginal tax rates remain

the same this year at 35% for incomes of more than $231,250 for individuals or $462,500 for married couples filing jointly; 32% for incomes over $182,100 or $364,200 for married couples filing jointly; 24% for incomes of more than $95,375 or $190,750 for couples; 22% for incomes of more than $44,725 or $89,450 for couples; 12% for incomes over $11,000 or less, $22,000 for married couples; and 10% for incomes of $11,000 or less, $22,000 for couples.

Changes already made to tax brackets for calendar year 2024 could mean a slightly bigger paycheck starting this month. Earning thresholds were increased about 5.4% because of inflation.

Last modified Jan. 10, 2024

 

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