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News and Updates from the IRS

February 10, 2023

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If you are a taxpayer in the United States, you may be wondering what the current tax related updates are from the IRS that could affect your tax filing and tax payments. Below is a summary of some of the most important changes and news from the IRS for tax year 2023.


One of the major changes for tax year 2023 is the annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. The IRS announced these adjustments in Revenue Procedure 2022-38, which provides details about these annual adjustments. Some of the highlights of these adjustments are:

 

  • The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.

 

  • The top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly). The other rates are: 35% for incomes over $231,250 ($462,500 for married couples filing jointly); 32% for incomes over $182,100 ($364,200 for married couples filing jointly); 24% for incomes over $95,375 ($190,750 for married couples filing jointly); 22% for incomes over $44,725 ($89,450 for married couples filing jointly); 12% for incomes over $11,000 ($22,000 for married couples filing jointly). The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).

 

  • The Alternative Minimum Tax exemption amount for tax year 2023 is $81,300 and begins to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption begins to phase out at $1,156,300).


Another change for tax year 2023 is the extension of certain energy related tax breaks and the indexing for inflation of the energy efficient commercial buildings deduction. The Inflation Reduction Act extended these provisions and provided new applicable dollar values to determine the maximum allowance and the increased deduction amount of the energy efficient commercial buildings deduction.
In addition to these changes, the IRS also provides updates and news on various topics that may affect your tax filing and tax payments. For example:

 

  • The IRS unveiled its Strategic Operating Plan, an ambitious effort to transform the tax agency and dramatically improve service to taxpayers and the nation during the next decade.

 

  • The IRS provided details clarifying the federal tax status involving special payments made by 21 states in 2022. During a review, the IRS has determined that taxpayers in many states will not need to report these payments on their 2022 tax returns.

 

  • The IRS issued standard mileage rates for 2023; business use increases 3 cents per mile.

 

  • The IRS granted disaster tax relief to taxpayers affected by storms in several states. The tax relief postpones various tax filing and payment deadlines that occurred starting on certain dates in 2022 or 2023.


These are some of the current tax related updates from the IRS that you should be aware of. For more information and details on these and other topics, you can visit the IRS website at www.irs.gov or contact our Tax Resolution Team at taxresolution@frostcpas.com or 423-486-9300.

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