The U.S. is experiencing its highest inflation in 30 years, and the IRS is taking notice.
The federal agency just announced that it’s adjusting the standard deduction, income tax rates and dozens of other tax provisions for 2022.
Because of the way tax filing years work, the changes affect the tax returns most Americans will submit in spring 2023. (The IRS issues these adjustments every fall, so the announcement is normal even though current inflation rates are certainly not.)
For 2022, the standard deduction will be $12,950 for single filers, an increase of $400 from 2021. It’s likely this decision will affect you: Ever since the Tax Cuts and Jobs Act passed in 2017, an estimated 90% of households take the standard deduction instead of itemizing their taxes.
But that jump doesn’t apply across the board. The 2022 standard deduction for heads of household — unmarried taxpayers with dependents — will be $19,400, a $600 hike, and $25,900 for married couples filing jointly, an $800 boost.