The bright side of inflation: tax relief

The bright side of inflation: tax relief

The IRS decided to exclude in the inheritance tax in 2023 at 860,000 Increasing US dollars, which means that heirs can now inherit $ 12.9 million without paying a federal tax bill, said Howard Hook, Principal and Senior Wealth Advisor at EKS Associates. Married couples can jointly inherited together, which limits their tax-free assets to almost $ 26 million.

The agreement could have a significant impact on those who are willing to give their descendants large amounts of cryptocurrency.

The marginal federal income tax classes have also increased by 7 %. The lowest tax rate of 10 % now applies to people with an income of $ 11,000 in 2023, compared to $ 10,275 in 2022. Taxpayers with an income of $ 231,250 or more now fall into the 35 % category, which previously started at $ 215,951.

"All changes mentioned above are positive for people," said Hook. "However, inflation is probably still negative about the finances of most people."

The capital gains taxes, which many crypto dealers surprised in the 2022 tax season, were also influenced by inflation.

"The type of increase in thresholds means more money on investors' bank accounts," said Gabriel Brin, Vice President for Tax and Accounting at Ledgible. "This has the positive effect that an investor for cryptocurrencies for 2023 compared to 2022 is increased."

single applicants who earn $ 44,625 or less annually can now probably qualify for a capital gains tax of 0 % on investments that are kept for one year or more. In 2022, individual anniversary had to earn $ 41,675 or less to qualify for 0 %. Americans who earn $ 492,300 or less now fall into the 15 % long -term capital profit for 2023, compared to $ 459,750 in 2022.

"Investors may be more inclined to take profits from positions, be it for short -term or long -term investments," said Brin. "A higher income and capital gains threshold means more scope to trigger a taxable event while sitting in the same tax class. This can cause investors to issue sales orders for long-term holdings while waiting for a good time to realize their profit."

The changes come because the IRS is preparing to combat further cases in connection with cryptocurrencies in the coming tax year. according to Kim Lee, head of the agency's criminal police. The department is currently building "hundreds" of cases that affect tax issues for digital assets, said Lee.