The standard deduction for 2023 will be $13,850 for singles and $27,700 for couples. The change would also cost approximately $96 billion over 10 years, the Penn researchers found. Richard Neal of Massachusetts, the committee’s ranking Democrat.

“The poorest fifth of Americans would receive just 2% of the benefits of this provision, and on average, that means a tax break of just $30 next year,” said Rep. Not only does the higher deduction phase out for incomes of $200,000 or more (or $400,000 for married couples), but a larger proportion of high-income households use itemized deductions. In fact, only a small percentage of the bottom 20% of households have enough income to get a tax cut under the proposal, the researchers from Penn concluded.īut those at the very top of the income ladder also wouldn’t see significant tax savings if the bill becomes law. However, since the standard deduction lowers the amount of income subject to tax, the deduction isn’t refundable and wouldn’t provide cash to lower-income taxpayers. Nearly two-thirds of households would get a tax cut in 2024 under the proposal, according to research from the nonpartisan Penn Wharton Budget Model. “The bonus $4,000 deduction is a $100 billion tax cut for the working families and will go a long way to make sure that my constituents can make ends meet.” Potential Impact of Standard Deduction Increase Carol Miller, R-West Virginia, adding that the measure will increase economic activity in local economies. “The vast, vast majority of my constituents use the standard deduction on their taxes every year,” said Rep.

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