Income Tax Adjustments Give a Break in Light of High Inflation

The Internal Revenue Service (IRS) has announced its new income tax brackets for 2023. There are some shifts designed to address the issue of bracket creep, which is when people move into a higher tax bracket despite no increase in income after accounting for inflation. The new tax brackets won’t completely solve the problem, and don’t address root causes of heavy inflation, but can provide some relief.

The IRS has done away with the 37% bracket entirely, so the most you’ll pay is 35%. For that, you’ll need a joint income of over $462,500, which is about 6.5 times the median household income in the US. Not only that, the minimum threshold has increased for every bracket, except the lowest 10% bracket which always has a minimum of $0.

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For the new tax brackets plus additional information, see here: https://journal.firsttuesday.us/will-high-inflation-help-you-pay-less-tax-for-2023/
You can also compare to 2022’s tax brackets here: https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets

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