How much is the standard deduction for 2023 income? How it works and who is eligible

The Internal Revenue Service announced that the 2024 tax season will kick off Monday 29 January this year. American taxpayers will have until 15 April 2024 to submit their 2023 tax filing or request a six-month extension.

As Americans pull together all their documents and forms they should be aware that the standard deduction increased in 2023. The term ‘standard deduction’ is the earnings threshold below which you will not have to pay tax on your income. This either means that you can reduce your tax bill, or it could free you from income tax entirely.

Every year the IRS adjusts the amount of income that is exempt from taxation as well as the income threshold for tax brackets to account for inflation.

Note, that dependents that can be claimed on another person’s tax return for the 2023 fiscal year are limited to a standard deduction of either $1,250 or your earned income plus $400, whichever is greater. However, the total can’t exceed the basic standard deduction for your filing status.

If your earnings are less than the above mentioned thresholds, then you will not be required to file a tax return in 2023. However there are some federal financial relief programs that require you to do so to claim the support.

What is the additional standard deduction?

Some earners are also eligible for an additional standard deduction, meaning that they can reduce their tax obligation or avoid federal income taxes entirely. If you are registered as blind or are aged 65 or older, you can claim the additional standard deduction.

This amount is added to the regular standard deduction to increase the threshold for eligible taxpayers:

For more information on how to calculate your standard deduction for 2023, head over to the IRS’ preliminary instructions help page.