Much like the freezing storms that have swept through most of the country this year, another wonderful sign of winter arrived yesterday, tax season! As it has been for the past few years, it’s important to note that there are little substantive changes in the rules for tax year 2023.
The indexed numbers for the 2023 tax year provide standard deductions at $13,850 for single filers, $27,700 for married filing joint filers. The state and local tax deductions remain capped at $10,000 regardless of filing status, meaning most taxpayers will not itemize their tax returns.
Tax rates also remain unchanged with the top income tax bracket staying at 37%, applying to individuals with more than $578,125 in income, $693,750 for married taxpayers. For those “in the middle”, the middle tax bracket calls for a 24% rate. That rate begins at $95,375 single/$190,750 married. You need more than $182,100 single/$364,200 married to climb into the next bracket.
While tax laws haven’t changed much, there are some new provisions becoming effective for tax year 2024 that may require you to modify your planning going forward. Accordingly, our series will focus on issues to address for this year’s tax season, but when applicable, items to consider for the 2024 tax year also will be addressed.
Our Private Client Services Team will be posting a new tax tip every Tuesday until April 16th, so be on the lookout for planning opportunities. Also, remember your Benjamin F. Edwards financial advisor is happy to work with you and your tax advisor to make filing your taxes as painless as possible. Happy Tax Season!
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.