Hagåtña, Guam – Governor Lou Leon Guerrero announced today that federal tax code changes will bring some relief for working families and individuals to help deal with the impacts of inflation. Major changes have been made to the standard deduction for income taxes for the 2023 filing period. The standard deduction is the baseline amount of income that taxpayers can collect tax free. Income thresholds have also been raised by 7% for all tax brackets to compensate for the effects of inflation.
“This means that working families will be able to take home more of their hard-earned dollars and this will be a help with the cost of living,” said Governor Leon Guerrero. “The standard deduction will increase by $900 to $13,850 for individuals and by $1,800 to $27,700 for married couples. This is the largest adjustment to deductions since 1985.”
Lt Governor Josh Tenorio added, “Our people will see these new changes reflected in their withholding statements on paychecks beginning in January, with workers securing more take-home pay. These changes in the tax code reflect changes the government can make to compensate for the rising cost of living.”
On the federal side, those Guam residents receiving Social Security will see a historic 8.7% jump in payments starting in January. This is the largest increase in 40 years. The maximum Earned Income Tax Credit will also go up from $6,935 to $7,430.
“These federal measures add to local efforts taken by our Administration to address the cost of living including the freezing of port tariff increases for the next two years and the $500 credit for power bills. To reduce our reliance on expensive imports over the long term we are also pursuing new initiatives to expand local agriculture, boost the Green Economy, and increase the use of renewable energy,” said Governor Leon Guerrero. “Our work is not done but we are well on our way to effectively reduce the burden on our people from the high cost of living.”
For details on all of the changes to the tax code, you can visit the IRS site at: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023