Congress advanced a new bill aiming to increase the standard tax deduction by $2,000 to $4,000 temporarily for many taxpayers.
Temporary increase in standard tax deduction in the new bill (photo source: Investopedia).
According to Kiplinger, the House Republican tax cut trio consists of three bills covering a wide variety of potential tax reforms, including a temporary increased standard deduction termed as the “guaranteed deduction.”
Last week, Representative Jason Smith proposed HR 3936, the Tax Cuts for Working Families Act, to assist alleviate the financial crisis of families brought on by inflation. Smith highlighted how the HR 3936 will provide desperately needed assistance to working families that have been affected by the Biden cost-of-living crisis and economy.
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Increasing the Standard Tax Deduction
According to Money Talks News, the primary objective of the HR 3936 is to increase the standard deduction for the tax years 2024 and 2025, for which tax returns are due in 2025 and 2026.
In 2024, the increase would be $4,000 per tax return for those married couples filing joint returns, and surviving spouses; $3,000 who filed as the head of the household; and $2,000 for single filers and married persons who have filed separately.
For the tax year 2025, the amounts would be adjusted in order to compensate for the inflation.
