![]() What they're saying: "Inflation adjustments to tax brackets mean that it will be harder for taxpayers to hit those higher brackets, and therefore will have more income taxed at lower rates next year," said Tim Steffen, director of tax planning with wealth management company Baird, in a statement. It is hard to imagine lawmakers joining together to enact this kind of policy now. Congress passed these adjustments the last time inflation was high decades ago.Thought bubble via Axios' Emily Peck: These adjustments happen every year but are significant now due to inflation. In September, chained CPI grew 0.2 percentage points slower than the standard CPI compared to 2021.Republicans at the time tied the adjustments to the chained Consumer Price Index, which tends to rise at a slower pace than the standard CPI.Worth noting: The jump could have been higher if not for a tax overhaul signed by former President Trump in 2017, the New York Times reports. By adjusting the tax brackets - as the IRS does every year - it is attempting to stop " bracket creep," which happens when inflation pushes taxpayers into a higher income tax bracket without an increase in real income.In September, consumer prices soared and were up 8.2% compared to a year before. ![]() ![]() State of play: Inflation is hitting Americans hard right now. Here's a breakdown of last year's income and rates: Married couples filing jointly brackets jumped about 7% as well. Individual rates: Each of the tax brackets' income ranges jumped about 7% from last year's numbers. Why it matters: The new brackets for 2023 mean paychecks for many Americans could see a boost, which will help consumers who are being hit hard by inflation and aren't seeing raises that keep pace with price increases. The Internal Revenue Service announced Wednesday higher federal income tax brackets and standard deductions for next year, which will be a welcomed cost of living adjustment for many Americans.
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