I bet you never thought inflation would be a good thing. Well when it comes to the federal tax bracket it is. All things must keep up with inflation and it’s no different pertaining to the IRS Federal tax brackets.
As a matter of fact, according to the law, tax provisions must be revised each year. Because of that, there are more than three dozen tax benefits, affecting nearly every taxpayer.
Personal and Dependency Exemption
The value of this was changed from $3,500 to $3,650. That’s a $150 increase for us. Now that’s some good news for most of us.
This has also changed for the better. It doesn’t matter if you file as married filing jointly, married filing separately, filing as a single, or head of household. All categories have an increased standard deduction. Filing head of household went up by $350. Did you know nearly two out of three taxpayers take the standard deduction?
Tax Bracket Limits
They also changed the tax bracket thresholds. They have all increased for each filing status. The taxable income threshold for separating the 15 percent bracket from the 25 percent bracket is $2,800 higher now. That applies if you fall into the married couple filing a joint return category.
Earned Income Credit
If you happen to be in the low or moderate income category then, there is good news for you too. If you’re a working family with two or more children, the earned income tax credit has gone up by $204. The amount of money you make is one of the factors that will determine your eligibility. The new limit is almost $2,000 higher.
IRS Federal Tax Brackets
If you don’t know what category you place in, you can find out with a click of your mouse. The IRS has a tax bracket table that sets it all out for you. First of all you have to know your filing status, how much money you made, and what type of deduction you will take. With that information you will see right where your taxable status is.
Best Outcome for Tax Return
Do you want to make sure your taxes are completed for the best possible outcome for yourself? I’m sure you do if you’re like most of us. I suggest you visit TurboTax Online They guarantee the largest refund possible or the lowest taxable income amount to be paid on if you end up having to pay.