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Less Taxes Coming Out Of Paychecks Next Year?

The worst inflation in decades might have a silver lining for many taxpayers. Annual inflation adjustments announced by the IRS should mean more of your 2023 wages will be subject to lower tax rates than they were this year. But David Tucker, with media relations, reminds us that it would also mean lower withholding. He says you may want to go to the IRS calculator to make an adjustment, depending on how much higher your take-home pay would be. Tucker says standard deductions, for people who don’t itemize their returns, are going up. The IRS is also raising the maximum amounts one can claim for the Earned Income Tax Credit by about seven-percent. Also next year, you’ll be allowed to contribute up to three-thousand-50 dollars to a flexible spending account, which can cover some out-of-pocket healthcare costs not covered by your insurance. But since the changes don’t apply until 2023, they won’t have any effect on your upcoming 2022 return.

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